MASTER 
NEGATIVE 


NO.  94 


13 


COPYRIGHT  STATEMENT 


The  copyright  law  of  the  United  States  (Title  17,  United  States  Code) 
governs  the  making  of  photocopies  or  other  reproductions  of  copyrighted 
materials  including  foreign  works  under  certain  conditions.  In  addition, 
the  United  States  extends  protection  to  foreign  works  by  means  of 
various  international  conventions,  bilateral  agreements,  and 
proclamations. 

Under  certain  conditions  specified  in  the  law,  libraries  and  archives  are 
authorized  to  furnish  a  photocopy  or  other  reproduction.  One  of  these 
specified  conditions  Is  that  the  photocopy  or  reproduction  is  not  to  be 
"used  for  any  purpose  other  than  private  study,  scholarship,  or  research." 
If  a  user  makes  a  request  for,  or  later  uses,  a  photocopy  or  reproduction 
for  purposes  in  excess  of  "fair  use,"  that  user  may  be  liable  for  copyright 
infringement. 

The  Columbia  University  Libraries  reserve  the  right  to  refuse  to  accept  a 
copying  order  if,  in  its  judgement,  fulfillment  of  the  order  would  involve 
violation  of  the  copyright  law. 


Author 


Trade 


Commission 


Title: 


Food  investigation 


Place: 


Washington, 

Date: 

1919 


.C 


MASTER   NEGATIVE   « 


,1 

r 


COLUMBIA  UNIVERSITY  LIBRARIES 
PRESERVATION  DIVISION 

BIBLIOGRAPHIC  MICROFORM  TARGET 


ORIGINAL  MATERIAL  AS  FILMED  -    EXISTING  BIBLIOGRAPHIC  RECORD 


RESTRICTIONS  ON  USE: 


ng  *■ 


^•INKSS 


U,  S.    Federal  trade  commission. 

Food  investigation.  Report  of  the  Federal  trade  commis- 
sion on  canned  foods.  Canned  salmon.  December,  1918. 
Washington,  Govt,  print,  off.,  1919. 

83  p.  Incl.  tables.    24i« 

Running  title :  Report  on  canned  foods. 


1.  Salmon.    2.  Canning  and  preserving-Industry  and  trade.- C^.  S 
I.  Tifle.  —  _ 

19—26310 
Library  of  Congress  |      JHD9330.S33U5    1918 


©opy^. 


o 


ia32d3| 


TECHNICAL  MICROFORM  DATA 


RLM  SIZE: 


=     35 


rr)f>r\ 


TRACKING  #  : 


REDUCTION  RATIO: 


ay 


IMAGE  PLACEMENT:  lA    @    IB      IIB 


DATE  FILMED:         \1-  /Q."  '^4 


INITIALS 


/MK  ^3UflU 


RLMED  BY  PRESERVATION  RESOURCES,  BETHLEHEM,  PA. 


Ai 


CaJ' 

3 

3 


0) 


13  ^ 

N  c/> 

00  M 


(Jl 

■■Mr 


> 

o  m 


CJl  3  ^ 


X 

< 

N 


M 


C^^^ 


"ah 


H 
0) 


o 
o 

3 
3 


o 

3 
3 


III 


r.% 


s 

3 
3 


O 


r"i5i?Ei;iSK 


m 


CO 

k> 


bo 


O^ 


CX> 


o 


to 
ro 


ro 


1.0  mm 


1.5  mm 


2.0  mm 


ABCDEFGHIJKLMNOPQRSTUVWXYZ 
atx:defghi|l<lmnopqrsluvwxy7l234567890 


ABCDEFGHIJKLMNOPQRSTUVWXYZ 
abcdefghijklmnopqrstuvwxyzl234567890 


ABCDEFGHIJKLMNOPQRSTUVWXYZ 

abcdefghijklmnopqrstuvwxyz 

1234567890 


ABCDEFGHIJKLMNOPQRSTUVWXYZ 
abcdefghijklmnopqrstuvwxyz 
2.5  mm  1234567890 


\&> 


tS^ 


^^ 


ko 


t3 

:0 


?# 


?P 


/^A 


'^. 


■^. 


rV 


r^ 


« 


.<' 


•?r 


^^H^JJ 


?d> 


f^ 


^ 


■^ 


o 
o 

-om-D 

X  z  ? 

o  m  ^ 

O  '    "O 

30  ^  -A 
>  C  u 

TJ  3"  w? 

7^  O  o» 

m 

JO 

o 

m 


<fi^, 


^^X**/. 

V 

'4!^ 


■z- 


%    ^^ 


^^^ 


^ 


■1— •■ 

i\)' 

'CJl' 

o 

3 
3 

3 
3 

i 

■O' 

3  I 
o  ^ 

li 


O' 


5  O' 


'pc  ^'~ 


'W 

^5 


Jr^M 


II 


l>  -"S      ^"'■fiiCU.  ir-^l      \  rot  Ail.      C  csw^m  iS  s  •■  cnn, 


n 


LIBRARY 


School  of  Business 


FOOD    INVESTIGATION 


REPORT 

OF 

THE  FEDERAL  TRADE  COMMISSION 


ON 


CANNED  FOODS 


CANNED  SALMON 


*    i    »       • 


•       >   * 


..    »  .1  ■*      • 


'.-.  I     t     -.1 


.  •  f    *  •       •  • 


DECEMBER,  1918 


WASHINGTOW 

CiOVKKNMENT  PRINTING  OFKICI:: 

1919 


■iiiiiiiii*'!,,. 


William  B.  CoiuVer,  CWnrnn. 
JoBN  Pranklin  Fort. 
Victor  Mumdock 


•/ 


liEONiDAs  L.  Braokbn,  Secretary. 


J)  3,0 


I 


I* 


LETTER  OF  TBAVSMITTAL. 


Federal  Trade  Commission, 

Decemler  27,  1918. 
To  the  President  of  the  United  States. 

Sir:  I  have  the  honor  to  transmit  herewith. the  report  of  the 
Federal  Trade  Commission  on  the  production  and  distribution  of 
canned  sahnon.  This  report  presents  additional  information  secured 
in  the  course  of  the  general  food  inquiry  which  was  imdertaken  in 
accordance  with  the  instructions  given  in  your  letter  of  February  7, 
1917. 

Respectfully, 

William  B.  Colver,  Chairman, 


ii*i iiiliiiniii* 


V_ 


CONTENTS. 


Summary. 


ACKirOWIEDGMEirT. 


^  In  connection  with  the  preparation  of  this  report,  the  Commission 
desires  especially  to  mention  Mr.  Paul  D.  Converse,  who  acted  as 
examiner  in  charge  of  the  canned  sahnon  inquiry  under  the  super- 
vision of  Mr.  Lewis  H.  Hanev,  assistant  chief  economist.  Valuable 
^s^stance  was  rendered  by  Mr.  Kemper  Simpson  and  Mr.  Stephen  I 


The  growing  importance  of  canned  salmon 1> 

The  grades  of  salmon - * 

The  production  and  distribution  of  canned  sabnon J 

Costs ; 

The  marketing  of  canned  sahnon J 

Prices - :JjJ 

Margins  and  profits *JJ 

The  dominant  interests  in  the  industry - j" 

The  Sulzer  bill  and  the  Alexander  bill :-•---• JJ 

Suggestions  for  the  improvement  of  conditions  in  the  salmon  canning  industry. .  U 

Chapter  1.— General  Description  op  the  Salmon  Canning  Industry. 

Sec.  1.  History  of  the  salmon  canning  industry 13 

2.  Species  of  salmon  and  the  runs J* 

3.  Methods  of  catching  salmon j^ 

4.  Fish  purchased  and  caught  by  canners - JJ 

5.  Difficulty  in  securing  fish «f 

6.  General  method  of  marketing  canned  salmon 21 

7.  Importance  of  sales  agents  and  brokers 22 

8.  Business  done  by  the  brokers ;  V  * ; oS 

9.  Canners'  methods  of  distributing  their  goods— sales  agents  and  brokers. .  26 
10.  Labels  used  on  canned  salmon 28 

Chapter  2.— The  Consumption  and  Production  op  Canned  Salmon. 

Sec.  1.  Consumption  and  export  of  canned  salmon 31 

2.  Salmon  packs  of  1916  and  1917 ^ 32 

Chapter  3.— The  Cost  of  Packing  and  Marketing  Canned  Salmon. 

Sec.  1.  Items  included  in  cost  of  production 36 

2.  Cost  of  production  1916,  1917 3« 

3.  Range  in  the  cost  of  production ^ 

4.  Cost  of  canning  salmon  by  grades ^ 

5.  Cost  of  canning  in  the  different  size  cans ^ 

6.  The  costs  of  large  and  small  companies  and  large  and  small  plants 46 

7 .  Expense  of  marketing  canned  salmon 47 

Chapter  4.— The  Price  op  Canned  Salmon. 

Sec.  1.  Meaning  and  importance  of  "opening  prices" 49 

2.  Opening  prices  of  1916-17 -  ^ 

3.  Future  sales  and  prices ^ 

4.  Spot  prices  of  canned  salmon ^ 

5.  Brokers'  prices - ^ 

6.  Control  of  prices  by  brokers *' 

Chapter  5.— Capitalization,  Investment,  and  Profits  in  the  Salmon  . 

Canning  Industry. 


Sec. 


1.  Capitalization ^8 

2.  Investment  in  the  industry ^ 

3.  Profits  of  salmon  canning  companies  in  1916-17 61 

4.  The  investment  and  the  profits  of  the  brokers 64 

5.  Brokers'  earnings ^^ 

5 


^  OOlTTlirTB. 

Chapter  6.~Oboanization  and  Contsol  in  the  Salmon  Canning  Indus- 
try. 

8««1-  Advantages  of  large  companies ^^^g 

2.  The  size  of  the  companies  and  plants  from  a  social  point  of  view .' .' ' '."  *  70 

3.  The  companies  that  dominate  the  industry '  7X 

4.  Relation  with  outside  interests 74 

Chapter  7.— Legislation  to  Protect  the  Supply  op  Salmon 75* 

Chapter  S^SuooiiwiONs  for  the  Improvement  op  CoNDiTioNS*iN'*THB 

Salmon  Cannino  Industry «mnuKB  i«  the 


LIST  OF  TABLES. 


2. 
«j< 
4„ 
5. 
If, 

10. 

is] 

15. 
16. 

lo> 

fill. 

'■■' -Jlf  • 

23.' 

24. 

25. 
2i. 

27. 

28. 

90 

30. 

•12* 


iBCTMse  in  the  production  of  canned  salmon  (cases) 14 

Number  of  fish  canned  and  purchased ""* inil 

Valuation  of  trap  sites ''' 18 

Number  of  fish  canned  and  purchased  by  districts:  iVlfiklV.*.'.  .1 '  20 

Trade  channels  used  in  the  marketing  of  canned  salmon.  1916^17 2 V24 

.  Sales  of  canned  salmon  by  brokers  in  1917 Is 

Canners'  distribution  of  their  salmon  packs,  1916-17       . '. 27 

-  Labels  used  on  canned  salmon 99 

-""rSl^y^^'l^S^^  exporied  fromthe  ilnited'siates-during 

Kelative  importance  of  different  species  within  each  district  33 

Relative  importance  of  districts  in  production  of  each  species 34 

A verage  cost  of  producing  canned  salmon  (per  full  case  in  1916-17) 37 

1916^n  °^^*''^^*^®  **^  various  cost  items  in  production  of  canned  salmon] 

Number  of  cases  of  salmon  packed  below  different  coste  inigi&^i? 41 

Cost  of  canning  different  grades  of  salmon:  1916 40 

Cost  of  canning  different  grades  of  salmon:  1917 43 

Average  cost  of  canning  different  grades  of  salmon 44 

i/ost  of  canning  salmon  in  the  different  sized  cans:  1917 ...          45 

C  omparison  of  "nit  costs  of  production  of  typical  plants  having'  lii^  and 
small  outputs:  1916-17 *-        r  -^       e    «"« 

Opening  prices  on  canned  salmon  since  1897 kS 

Opening  pnces  in  1916-17,  with  percentage  of  companies "  ^ki^g'  ih^se 

Dates  when  opening  prices  were  announced  ..  -*'-'] si 

Brokers*  prices  of  canned  salmon  during  191 7 s? 

C  apitahzation.  borrowed  funds,  and  outside  investments  of  salmon  (Siiiiie 

companies  on  Dec.  31,  1917 wwuuxig 

Investment  in  salmon  canning  companies.*  i*9i'6^i7".".'.* '.'.'." aa 

Net  profit  of  salmon  canning  companies,  1 916-17 ...                 gi 

Profits  or  losses  of  canning  companies  on  investment "*  m 

•Sales  and  profits  of  salmon  canning  companies.                             «? 

Investments  and  the  earnings  of  brokers  during  i916 '  «? 

Investmenta  and  the  earnings  of  brokers  during  1917               «« 

Kepresentative  salmon  brokers'  earnings  per  case                     §7 


SUHMABT. 

The  inquiry  upon  which  this  report  is  based  is  part  of  a  com- 
prehensive investigation  of  food-producing  industries  undertaken 
at  the  special  direction  of  the  President  of  the  United  States.  The 
Commission  has  akeady  issued  a  report  discussing  the  canning  m- 
dustry  in  general  and  presenting  data  concerning  the  costs,  pnces, 
and  profits  of  representative  canners  of  vegetables  and  fruits.* 

The  following  report  is  confined  to  the  salmon  canning  industry 
and  is  based  upon  practically  complete  returns  ftom  all  the  sahnon 
canners  in  the  United  States,  including  Alaska.  The  material  upon 
which  this  report  is  based  has  been  secured  in  part  through  schedules 
which  were  sent  to  all  salmon  canners,  and  in  part  by  an  examination 
of  the  books  of  representative  sahnon  canners  made  by  the  CJommis- 
sion's  accountants.  In  all,  schedules  were  received  from  over  100 
companies,  packing  more  than  8,000,000  cases  of  salmon  in  1917. 
Cost  statements  were  compiled  by  the  Commission's  accountants 
from  the  books  of  19  companies,  operating  54  plants  and  packing  52 
per  cent  of  the  total  production  in  1916;  statements  were  compiled 
for  1917  from  the  books  of  20  companies,  operating  62  plants  and 
packing  50.5  per  cent  of  the  year's  total  production. 

THE  GBOWINa  IMPOBTANOB  OF  CANNED  SALMON. 

Canned  salmon  is  a  most  important  food  product,  having  a  high 
proportion  of  protein  and  fat.  The  production  of  canned  salmon  in 
the  United  States  has  increased  faster  than  the  population.  Although 
a  part  of  the  increased  production  has  gone  into  increased  exports. 
the  per  capita  consumption  has  also  increased.  The  quantity  shipped 
abroad  in  the  fiscal  year  1917  was  over  117,960,000  pounds.  That 
the  United  States  Government  announced  that  it  would  take  for 
the  Army  and  Navy  approximately  80  per  cent  of  the  1918  pack  is 
indicative  of  the  military  importance  of  this  concentrated  food. 

The  growth  of  the  sahnon  canning  industry  is  roughly  mdicated 
by  the  statistics  of  production.  The  increase  in  the  pack  was  as 
foUows: 

Cases. 
loiM  '         2,000 

loooT.:"::'.:;;'.;*-.'".'." 2,435,002 

•^gU         8, 584, 615 

The  first  salmon  cannery  in  Alaska  was  opened  in  1878.  During 
the  eighties  the  industry  had  a  rapid  development,  and  in  1892  there 
were  31  canneries.  While  in  1890  a  httle  over  682,000  cases  were 
packed  in  Alaska,  by  1917  the  output  was  nearly  6,000,000  cases  or 
considerably  over  three-fifths  of  the  total  quantity  produced  m  the 
United  States.  Estimates  indicate  that  the  per  capita  consumption 
in  the  fiscal  year  1900  was  1.2  pounds,  and  that  in  1917  it  was  1.8 
pounds,  indicating  a  considerable  increase  in  the  use  of  this  food. 

1  Report  of  the  Federal  Trade  Commission  onJCanned  Foods.  General  Report  and  Canned  Vegetables 
and  Fruits,  Washington,  May  15. 1918. 

¥ 


BBPOBT  OH-  OABirSD  FOODS. 
THE  OSASBS  OP  SAIJION. 


♦„P"?."f?  fi'^e.species  of  salmon  which  are  of  commercial  imoor 
tance:  "chmook"  or  "kinp"  "r«l"  nr  "o«„i,„tr_Vr<<      j-     "°P"^: 
ni."««i,„»ii   •  1  »      jTt^p'       ™"     *"     socKeye,       medium  red 

11  J?^'  ■    P^/  and  "cEum."     (The  chinook  species  is^mfitinTfia 

caJled  "quumat;    the  red  sometimes  "blueback"  or  "^uki^U  '^h« 


inedium  red,,  "rilve«ide-"the"pii5.  ''hum;b;ck:"  ^TS'e'i^hC 

C^±'Z''^±^JP^^1  ^^  «t?«lhead  trout! 


c'ai^H  rhi'Jfi-^P*i.I^  ""uiuoii  lo  inese  species,  tHe  steelhead  trout, 

^steeIhet7'^«Wn^*5J^'*'*i^'T  ""^  ?V^«*  Sound,  is  marketed 
^  nvt-    .  s*™on-    The  red  salmon,  whiSi  is  found  from  north- 
ern Cahforma  to  the  Arctic  Ocean,  is  the  most  importSlt  CT^e  cmn 
mercially,  though  in  1917  more  pink  sahnon  wal^  c^eHfan^; 

high  a  pnce  as  the  red  salmon  because  its  flesh  is  paler  and  leTw 

THB  PKODUOnOW  AND  DI8TBIBOTION  OF  CANNED  SALMON. 

.on'^li'^?''^''' .P^^V'^y  in  n«te,  traps,  and  seines  often  at 
considerable  distances  from  the  canneries.     Near  y  70  ner  cLit  K« 

"tLn^  '^1^T5  <='^-„„The  most  important  sizes  are  the  1-pound 
«S^^c       i-pound    "flats,"    and    1-pound    "flats."    There   M-e 

ine  DUIK  of  the  pack  is  disposed  of  by  the  canners  through  hrokor= 
or  selhng  agente-a  notable  characteristic  of  Z  mS  beS^ 

SS^IofXln*^? ';^^'''  ^'''^  '«^*"  ^1^0  h^diralforTLge 
o^tf!«  T  wis  i°**""^  •"■  ™,°''*'  tanneries  as  exclusive  agent  througS- 
th.  iQ?7 V^^  States  or  a  large  part  thereof.    Eighty  per  cent  of 

£l  compres  s^'old  fit^?"^^  't'-  "^t"^  ^^  nfarfyCe-hdf  of 
mfssionZtpH  hi  K  t  ^"*""«  pack  in  this  way.  The  rate  of  com- 
mission charged  by  brokers  and  sales  agents  was  5  per  cent  in  mosf 

ta^i7.     ""'^"^  ^™°'  «8  low  as  2  per  cent  to  as  higrasTs  p^rZt 

The  canners  sell  most  of  their  salmon  nt  '^nnaninc  r^^i^^o  n     i.-  i. 

are  generafly  named  in  Aupst"  STfoUe  nEfKs'e  pri^^"* 

the  cannere  generaUy  make  S.  A.  P.  sales-i.  e     sfl^  "subi^ff  tC 

^^^^.^  Pk""*-"     ^^  2P«"i"g  prices  are  naiietTf  on  this  A 
^;«ntA;*^^  ^«T  ""7  '^°^™^  tJ»«  purchase  of  all  or  of  a  part  of 'the 
quantity  specified,  or  he  can  cancel  flie  entire  contract.      P^**^  ^^ 

OOBTS. 

onIhltee3"^k%i?rhr tat  ZS  ''PP^r.''*^!^ 

ITL^  .^  ^ii-    ^  represented  an  increase  of  82  cente 

rJc^tertotKrifc^o^^ttee^sr^cZ^'^^^^^ 

^  19.7  is  presented  for'L  P^r^^T^v^^rg^erd  i^Srol 

2?™*^?°*!  °-  ^V^^  items  which  ^terlto^Z  co^  orcZed 
saJmon  (exclusive  of  selling  expense).  camiea 


BEPOKT  OK  CANNED  TOODS. 


Cost. 

• 

Percaae. 

Per  can. 

"R&w  material  .  .     .      ...  ................rf. ...-•.......«.........•-.»-..•»•-••»••• 

IL444 

1.133 

.TUT 

1.160 

10.030 

PackaGre                 .  .........  ...............................•.•••■••••«•-•••••••..>• 

.023 

Conversion                              .  .  ..................................•.•.•.••••••-•••'•• 

.017 

Overhead                       ..     ...  ..  ...  .........................■••••.•••••«.-•••••••• 

.OM 

Gross  cost  of  nrodtiction         -  -    -.-  -  ........•....•.•••.••.•••••»•••••»••••• 

1540 
.110 

.094 

Crodit  from  bv-Droaucts  f saH  fish,  fertilizer,  etc.)  .................................. 

.003 

Total  net  cost  of  nroduction       ............................................... 

4.430 

.002 

The  range  of  costs  was  considerable.  Some  salmon  was  packed  in 
1917  at  a  cost  as  low  as  $1.20  per  case,  while  some  was  packed  at  as 
high  as  $26.50  per  case.  These  extreme  figures,  however,  were  ab- 
normal. The  great  bulk  of  the  pack  was  produced  within  a  rela- 
tively narrow  range  of  costs.  Ninety-two  per  cent  of  the  1916  pack 
was  produced  at  costs  less  than  $5.50  per  case,  and  91  per  cent  of  the 
1917  pack  was  produced  at  costs  below  $7.50  per  case.  None  of 
these  cost-of-production  figures  include  selling  expense. 

The  costs  of  producing  canned  salmon  vary  not  onhr  from  plant  to 
plant,  but  also  for  the  different  species,  and  in  the  different  locahties. 
The  different  species  are  chiefly  caught  in  certain  localities  so  that 
these  two  elements  in  the  situation  are  interrelated.  Many  can- 
neries are  located  in  sections  where  practically  all  of  the  fish  caught 
are  of  one  grade,^  and  when  90  per  cent  or  more  of  the  output  of  a 
plant  consisted  of  one  grade  of  salmon,  the  Commission  took  the  cost 
at  such  a  plant  as  representing  that  grade.  If  this  method  of  differ- 
entiating costs  be  borne  in  mind,  the  following  statement  will  be  of 
value  as  indicating  the  approximate  variation  in  the  average  cost  of 
producing  the  red  and  the  pink  grades  of  salmon: 


1916 


Red  or  eockeye $3,865 

Pink 2.923 


1917 
$4;871 
4.228 


The  chief  reason  for  the  difference  in  cost  was  the  difference  in  the 
cost  of  raw  fish.  The  proportion  of  waste  involved  in  packing  the 
several  species  also  varied  somewhat  widely.     (See  page  39.) 

THE  MABKETING  OF  CANNED  SALMON. 

Considerable  difficulty  was  experienced  in  ascertaining  the  cost  of 
marketing  canned  salmon.  Most  salmon  canners  maintain  no  sales 
departments,  and  do  little  or  no  advertising.  Their  chief  marketing 
expenses,  therefore,  consist  of  brokerage  or  commission.  The  ordi- 
nary brokerage  rate  is  5  per  cent.  A  total  of  24  companies,  packing 
approximately  50  per  cent  of  the  1917  production,  reported  a  market- 
ing cost  of  27.2  cents  per  case,  or  3.59  per  cent  of  the  net  selling  price. 
A  more  careful  analysis  was  made  of  8  large  companies,  whose  records 
of  selling  expense  were  more  complete.  This  analysis  showed  an 
average  selling  expense  of  38.2  cents  per  case.  The  average  selling 
expense  included  brokerage,  which  represented  4.36  per  cent  of  the 
selling  price,  and  other  expenses  such  as  advertising,  salesmen,  etc., 
which  represented  1.029  per  cent  of  the  selling  price. 

I  By  "grades"  are  meant  "species." 


10 


BIrOKF  O'N  OAInJmBD  IfOODS. 


The  advance  in  the  New  York  wholesale  spot  price  of  canned  salmon 
during  1916  and  in  the  early  part  of  1917  was  rapid,  but  no  more  so 
than  the  increase  in  food  prices  in  general  Approximately  90  per  cent 
of  all  canned  salmon  is  said  to  be  sold  at  the  openingprice  (see  p,  49). 
The  opening  prices  reported  by  the  canners  to  the  (Commission  indi- 
cated that  me  most  frequent  prices  per  dozen  1-pound  cans  for  some 
of  the  chief  grades  of  salmon  of  1916  and  1917  were  as  follows: 


1910 

1917 

Bad ., , 

Mwlfam  fwS . . , ■ , , , . . 

tl.50 

1.30 

.90 

.85 

12. 3S 
2.00 

Plnlr., 

1.66 

drain.... 

1.60 

The  Commission's  investigation  shows  that  the  average  opening 
price  for  all  grades  of  canned  salmon  made  in  August,  1917,  was 
18.33  per  case  (48  pounds).  The  averag:e  price  realized  by  the 
canner  on  all  sales  made  during  1917,  including  a  ^art  of  the  1916 
pack  sold  in  1917,  however,  was  $7.28. 

MABOZNS  AND  FBOFITS. 

The  average  selling  price,*  the  average  cost,  and  the  avera^je  profit 
for  1917  were  about  as  follows:  **  '  "^    ^ 

Average  selHug  price  per  case  aold  * |7. 28 

Average  cost  per  case  eold  ^^ 4.74 

.Average  groes  profit  p«  caae  sold  ' 2. 54 

Although  the  increase  in  the  price  of  canned  salmon  was  compara- 
ble with  the  increase  in  the  general  level  of  food  prices,  the  margins 
and  profits  of  the  salmon  canners  increased  largely.  The  average 
net  profits^  per  case  sold  in  1916  amounted  to  approximately  $0.91 
and  m  1917  to  approximately  $2.48,  an  increase  of  more  than  170  per 
'Cent. 

The  Commission's  report  shows  that  the  average  net  investment 
per  case  of  canned  salmon  produced  in  1916  was  $4.97,  and  that  in 
1917  it  was  $4.31,  the  decrease  being  due  chiefly  to  the  larger  pack 
produced  in  the  latter  year.  On  this  average  net  investment  the 
average  profit  of  all  salmon  canners  from  whom  data  were  available 
amounted  in  1916  to  22.1  per  cent,  and  in  1917  to  52.7  per  cent. 

THE.  BOmnrAMT  IWSSBMWSB  TM  THE  INBUSTBY.  ' 

The  Commission's  incjuiry  indicates  that  a  large  degree  of  con- 
trol over  price  is  exercised  by  a  few  dominant  interests.  It  is  a 
general  practice  in  this  industry  for  one  or  two  concerns  to  annoimce 
the  opening  prices,  which  are  followed  by  the  canners  producing  a 
great  bulk  of  the  pack.     Over  53  per  cent  of  the  1917  pack  was  pro- 

>  Til*  snmiiiit  of  tht  total  nat  sales  diTlded  by  the  total  number  of  cases  sold.    *'  Net  sales"  represented 
**0m»  Bitos*'  with  dediMittes  (or  discount,  allowances,  etc. 

«  Cost  per  case  sold  means  "cost  of  sales."    See  table  in  section  3  of  chap.  5.    A  part  of  the  selling  expense 
is  ImoliidM  in  cost,  bat  as  all  of  the  canners  did  not  report  their  selling  expenses  the  actual  average  price 

ffiid  hf  fbe  buyers  daring  1917  was  somewhere  above  $7.2S 

>  %m  footnote  on  p.  03. 


BBFOBT  OZT  GAKNED  FOODS. 


4uced  by  five  groups  of  companies,  each  group  bemg  subject  to 
a  common  control.  A  considerable  degree  of  interrelation  between 
the  meat  packers  and  the  dominant  interests  in  the  salmon  canning 
industry  is  indicated,  but  no  evidence  has  been  found  to  show  that 
thi«  interrelation  has  directly  affected  prices. 

The  control  of  the  valuable  trap  and  net  locations  by  a  compara- 
tively few  companies  has  enabled  the  dominant  interests  to  develop 
^even  more  rapidly  than  their  efficiency  in  production  would  have 
warranted.  Efficiency  in  production  seems  to  have  been  more 
dependent  upon  the  size  of  the  plant  than  upon  the  size  of  the  com- 
pany.^ Canners  with  desirable  trap  locations  undoubtedly  enjoyed 
a  distinct  advantage  over  those  who  had  less  valuable  sources  of  raw 
fish.  It  seems  evident  that  the  dominant  interests  should  not  be 
allowed  to  obtain  monopolistic  control  of  the  sources  on  which  the 
-entire  industry  depends.  ,  ,   x  x  j 

The  report  of  this  Commission  on  the  meat  packing  mdustry '  stated 
that  the  great  profits  of  the  packers  were  not  primarily  due  to  excep- 
tional efficiency  in  operatmg  packing  houses  and  manufacturing 
plants,  but  were  secured  through  theu-  monopolistic  control  of  the 
distributive  machinery.  With  the  control  of  the  distributive  machm- 
«ry  which  those  salmon  canners  who  are  affiliated  with  the  meat 
packers  now  possess— added  to  the  relation  between  the  salmon  can- 
ners and  the  sales  agencies  who  market  the  bulk  of  the  pack  and 
who  control  the  price— a  monopoly  of  the  sources  of  supply  would 
enable  the  dominant  mterests  to  exert  a  control  in  the  mdustry  which 
might  even  surpass  that  exerted  by  the  "Big  Five"  m  the  meat 
industry. 

THB  SULZEB.  BILL  AND  THB  ALEXANDER  BILL. 

There  are  two  bills  in.  Congress  pending  which  are  intended  to  protect 
the  Alaskan  fisheries.  And  nearly  70  per  cent  of  the  total  Ameracan 
flalmon  pack  is  produced  in  Alaska.  A  bill  introduced  by  Renresent- 
ative  Sulzer,  of  Alaska,  which  is  said  to  have  the  approval  of  the 
people  of  Alaska  and  to  be  opposed  by  the  salmon  canners,  proposes 
to  take  the  administration  of  the  salmon  fisheries  out  of  the  jurisdic- 
tion of  the  Bureau  of  Fisheries  (Department  of  Commerce)  and  to 
.  give  it  to  the  legislature  of  Alaska.^  The  Alexander  bill  represents 
the  opinion  of  the  departments  and  committees  of  the  Federal  Gov- 
ernment and  has  the  approval  of  many  of  the  salmon  canners.  There 
is  one  fundamental  difference  in  the  provisions  of  the  two  bills.  At 
present  in  Alaska  the  duration  of  a  license  to  a  trap  or  net  location  is 
1  year;  these  Ucenses  are  ordinarily  renewed  from  year  to  year  and 
the  possession  of  the  licensees  is  almost  invariably  respected.  The 
Sulzer  bill  proposes  a  5-year  tenure  of  these  licenses,  while  the 
Alexander  bill  proposes  a  15-year  tenure.  Disregarding  at  this  place 
any  consideration  of  the  minor  differences  in  the  two  bills,  the  Com- 
mission favors  control  by  the  Bureau  of  Fisheries,  as  provided  in  the 
Alexander  bill,  but  considers  the  5-year  license  term  provided  in  the 
Sulzer  bill  preferable  to  the  15-year  term  of  the  Alexander  bill. 

'  See  Dace  46 

»  See  Summary  of  Report  of  Federal  Trade  Commission  on  the  Meat- Packing  Industry,  Washington, 

July 3,  1918.  ^    ^^  ,    ,^ 

•  Every  act  of  the  legislature  is  subject  to  the  disapproval  of  Congress. 


12 


IBPORT  ON  OAKKED  FOODS. 


m^mmwmxmB  fob  tbm  ocpbovement  of  conditions  in  the 

SAIiVOlf-OANNINa  INDITSTIIY. 

In  the  concluding  chapter  of  this  report  the  Commission  makes 
certam  suggestions  for  the  improvement  of  conditions  found  in  the 
production  and  marketing  of  canned  salmon.  These*suggestions  may 
be  summarized  as  follows: 

1.  That  the  recommendations  contained  in  the  Commission's  Re- 

fort  on  Canned  Foods :  General  Report  and  Canned  Vegetables  and 
ruits,  which  apply  to  conditions  obtaining  in  the  salmon  industry, 
should  be  considered.  These  recommendations  concern  economy  in 
boxes,  standardization  of  grades,  labels,  and  unnecessary  reselling. 

2.  That  the  Bureau  of  Fisheries  have  control  of  the  salmon  fishenes 
of  Alaska  in  the  interest  of  good  administration  and  for  the  prevention 
of  any  possible  inonopoly  in  the  future. 

3.  That  licenses  to  trap  locations  should  not  run  for  more  than  5 
years,  but  that  renewal  thereof  should  be  allowed;  and  further,  that 
tt  trap  location  should  not  be  allowed  to  remam  in  the  possession  of 
anyone,  unless  he  makes  use  of  it  for  at  least  3  years  durmg  such  5- 
year  term. 

4.  That  some  agreement  be  made  between  the  United  States  and 
Canada  for  the  regulation  of  fishing  in  the  Puget  Sound,  and  that  this 
agreement  be  designed  to  meet  the  difficulties  relative  to  the  price  to 
be  paid  for  fish. 

6.  That  some  department  of  the  Government  should  furnish  infor- 
mation which  would  facilitate  a  mor^  du-ect  marketing  by  salmon 
canners,  so  as  to  limit  the  payment  of  sub-brokerage. 

6.  That  the  announcement  of  an  opening  price  is  dangerous,  and, 
as  at  present  conducted,  should  be  discontinued. 

7.  That  "S.  A.  P.  sales''  (sales  subject  to  the  opening  price)"should 
be  restricted. 

Other  suggestions  made,  concern  more  uniform  can  prices,  the  limi- 
tation on  maintenance  of  nommally  separate  sales  agents,  and  the 
need  of  better  cost  accounting. 

William  B.  Colver,  Chairman^ 
John  Franklin  Fort, 
Victor  Murdock, 

Commissioners. 


CHAPTER  I. 
OEISTEEAL  DESCEIPTIOIT  OF  THE  SAIMOH  CABTIfflNG  IHDUSTBY. 

Section  1.  History  of  the  salmon  canning  indnstry. 

The  first  salmon  cannery  in  the  United  States  was  started  in  1864 
in  Sacramento,  Cal.,  by  Wm.  Hume,  G.  W.  Hume,  and  Andrew  S. 
Hapgood,  a  tinsmith  who  had  previously  canned  a  few  salmon  on  the 
Bay  of  Chaleur,  Canada.  Some  salmon  have  been  canned  intermit- 
tently on  the  Sacramento  and  San  Joaquin  rivers  ever  since  this  early 
beginning.  However,  the  larger  runs  of  fish  farther  north  induced 
these  pioneers,  in  1866,  to  start  a  salmon  cannery  at  Eagle  Cliff  on 
the  Columbia  Kiver.  Other  canneries  were  soon  built,  and  31  were 
established  on  the  Columbia  River  by  1881.  This  river  has  produced 
more  salmon  than  any  other  single  stream.  The  industry  grew  until 
620,000  cases  were  packed  in  1884. 

Chinese  laborers  were  first  employed  at  the  Eagle  Cliff  cannery  in 
1872.  They  proved  more  reliable  and  less  troublesome  than  the  tjrpe 
of  laborers  previously  recruited  in  the  cities  for  the  canning  season. 
Soldering  machiiies,  steam  box,  and  lacquering  machines  were  first 
used  on  the  Columbia  River  in  1871. 

The  first  cannery  on  Puget  Sound  was  built  in  1877,  at  Mukilteo, 
Snohomish  County.  The  development  was  slow  at  first,  but  after 
1894  the  Puget  Sound  industry  grew  rapidly.  Pink  or  humpback 
salmon  were  first  camied  in  this  section.  Every  effort  was  made  to 
induce  the  public  to  buy  this  grade.  In  spite  of  these  efforts  a  market 
for  this  grade  was  slow  on  developing.  Sockeye  salmon  was  canned 
on  Puget  Sound  in  the  late  eighties,  but  were  not  labeled  ''Sockeye" 
until  1894-95.  Sockeye  salmon  was  not  generally  sought  in  the 
market  until  the  Spanish-American  War  caused  a  heavy  demand. 

Salmon  had  been  salted  and  dried  by  the  Indians,  both  in  the  United 
States  and  in  Alaska,  long  before  the  country  was  settled  by  the  white 
man.  Salt  salmon  was  not  only  an  important  food,  but  was  one  of 
the  articles  shipped  from  these  sections  by  the  early  traders.  In 
Alaska  a  few  Russians  had  been  engaged  in  salting  salmon  before  the 
United  States  purchased  the  Territory.  The  first  salmon  cannery  in 
Alaska  was  opened  in  1878,  at  Klawakan,  on  the  west  coast  of  Prmce 
of  Wales  Island,  and  in  the  same  year  another  cannery  was  built  near 
Sitka.  During  the  eighties  the  industry  had  a  rapid  development, 
and  moved  north  and  west.  Nearly  every  year  several  new  canneries 
were  built,  and  in  1892  there  were  31  in  existence  in  Alaska. 

The  development  was  so  rapid  that  by  1889  the  canners  felt  that 
there  was  an  overproduction,  and  got  together  in  order  to  limit  pro- 
duction. In  1890  the  three  canneries  at  Chiguik  combined  under  an 
operating  agi'eement  known  as  the  Chignik  Bav  combination.  Two 
of  the  canneries  were  closed,  and  the  profits  of  the  third  were  divided. 
The  Alaska  Packers  Association  was  formed  in  September,  1891,  to 
dispose  of  the  363,000  cases  of  unsold  salmon,  and  expired  when  the 
salmon  was  sold.     Early  in  the  foUomng  year  25  of  the  31  caimeries 

18 


RBPOIT  OK  CAKNED  FOODS. 


formed  the  Alaska  Packing  Association  to  reduce  the  size  of  the  pack 
nJ^^ V-^oSf  ^^^«^l«sed,  and  the  size  of  the  pack  reduced  nearly 
one^half  in  1892.  On  February  9,  1893,  the  Alaska  Packers  Associa- 
taon  was  incorporated,  with  all  but  two  of  the  former  canneries  as 
members.  1  he  canneries  received  shares  of  stock  for  their  plants  and 
Had  to  buv  additional  shares  to  furnish  working  capital.  The  size 
of  the  pack  has  mcreased  steadily  since  1893. 
The  growth  of  the  industry  is  shown  by  the  following  table : 

Tabie  1.-INCKEASE  IN  THE  PRODUCTION  OF  CANNED  SALMON  (CASES).i 


Year. 


IMI... 
.1810.. 
1180.. 
IM... 
liOO.... 
1910... 

ins... 

1116... 


Outside 
Rivera. 


Total  to  date. 


3,000 

"'83,' 522 

72,074 

108.611 

183,  an 

180,130 
188,077 

I0D,M 


Columbia 
River. 


6,527,937 


150,000 
530,000 
435,774 
358,772 
301,415 
558,534 
626,683 
554,726 


Puget 
Sound. 


Alaska. 


20,150,239 


5,100 

8,000 

469,450 

567,883 

1,269,206 

691,625 

1,946,241 


19,823,422 


6,539 
682,591 
1,548,139 
2,413,054 
4,489,016 
4.970,544 
5,914,088 


British 
Columbia. 


Total. 


63,617,615 


61,849 
411,257 
606,540 
760.830 

1,133,381 
995,065 

1,577,486 


23,812,168 


'  2,000 

150,000 

687,010 

1,609,696 

3.091,542 

4,316,453 

7,639,267 

7,375,994 

10,162,102 


132,981,351 


k  *.S5"'*f  ****'"*  to  and  Including  1915  from  Bureau  of  Fkh*»riP«'  rAnnrt     Tis«,,«»  r^-  «  »*  u  /^  ,      ^, 
in  1816  and  1917  from  Paoflc  iJerman'a  YearbSk  "T^Xa  aitl*^^^    Figures  for  British  Columbia 
limits  beglmilng  to  andincluSngSl?    ^^'^^^    Totalto  date"  is  the  total  product  of  the  industry 

Sectioi  2.  Tie  spooies  of  salmoi  and  the  nuts. 

Salmon  are  found  widely  distributed,  but  the  commercial  canning 
of  salmon  is  earned  on  chieiy  along  the  shores  of  the  North  Pacific 

ffi^^r  ^'  ^"^^^  ^'^*^^'  ^^^^^  ^^^^«^b^^'  ^^^  Alaska     T^e 
industry  however,  is  growing  rapidly  in  Siberia  and  Japan.    Five 

It^'^v     ^^•^'''^  "^^r  «^°^?^«r<^ia^  importance.    These  species  are: 

River  ^rSn^^  in'  Ar^i.'?^^5  ^"^"f^  ^^^?^^^  *>^  the'^Colmnbia 
Kiver  and  king  m  Alaska);  red,  sockeye,   blueback,  or  quinnalt 

!!l^^«!  coho,  medium  red,  or  silverside  salmon;  humpback  or  pink 
wOmon,  and  the  chum   keta   or  dog  sabnon.    The  steelhead  trout, 
which  IS  canned  on  the  Columbia  River,  Puget  Sound,  and  a  few  of  the 
coastal  streams,  is  marketed  as  steelhead  sahnon. 
The  red  sahnon  18  the  most  unportant  commercially.    It  is  found 

telfrif  "'*''  ^*t^o™^  ^  ^^  H^^  ^*^«*^-  The  fiih  vary  in  size, 
il  ^^.^l^eau  of  Fisheries  gives  the  average  weight  as  five  pounds 
although  the  average  is  of  tenliigher  in  Alasfi.  Table  2,  whictshows 
the  average  number  of  fish  per  case  of  48  pounds  (net),  indicates  that 
fai!;!^?^^  T^  ""^  eachspecies  varies  from  section  to  section,  as  well 
as  from  year  to  year.  The  number  of  fish  requh-ed  to  fill  a  48-Dound 
ease  vary  from  about  4  kings  to  16  pinks.  ^ 


REPORT  ON  CANNED  FOODS. 


15 


Table  2.— NUMBER  OF  FISH  CANNED  AND  PURCHASED;  NUMBER  OF  CABES  PACKED 

AND  AVERAGE  NUMBER  OF  FISH  PER  CASE. 


1916 


District. 


We?t  Alaska 

Central  Alaska.... 
Southeast  Alaska. 

Puget  Sound 

Columbia  River.. 
Outside  Rivers'.. 


Totals  and  averages. 


Grade  offish. 


West  Alaska 

Central  Alaska 

Southeast  Alaska. 

Puget  Sound 

Columbia  River.. 
Outside  Rivers  I- . 


Totals  and  averages. 


West  Alaska 

Central  Alaska 

Southeast  Alaska. . . 

Puget  Sound 

Columbia  River 

Outside  Rivers  1 


Totals  and  averages. 


West  Alaska 

Central  Alaska 

Southeast  Alaska. 
Puget  Sound 


Totals  and  averages. 


West  Alaska 

Central  Alaska 

Southeast  Alaska 

Puget  Sound 

Columbia  River 

Outside  Rivers » 


Totals  and  averages. 

Columbia  River 

Totals  and  averages. 


Kings. 
...do. 
...do. 
...do. 
...do. 
...do. 


Reds.. 

do. 

do.- 

do. 

do. 

do. 


Medium  reds. 

do 

do 

do 

do 

do 


Pinks. 
do. 

do. 

do. 


Chums. 

do.. 

do.. 

do.. 

do.. 

do.. 


Steelheads. , 


Num- 
ber of 
com- 
panies 
report- 
ing. 


7 
6 
20 
15 
9 
7 


64 


8 
6 
29 
17 
8 
1 


69 


4 

6 

29 

17 

10 

8 


74 


3 

6 

27 

8 


44 


7 
6 
28 
15 
8 
5 


69 


Number 

of  fish 

caimed. 


111,381 
25,483 
148,286 
180,580 
865,392 
60,656 


1,391,778 


16,564,413 

1,387,647 

1,609,978 

2,593,240 

775,382 

59,352 


22,990,012 


394,048 
305,246 
1,018,014 
1,099,374 
346,597 
349,053 


3,512,332 


4,153,353 

4,102,775 

12,266,379 

1,800,875 


22,323,382 


1,144,595 

331,423 

3,661,176 

2,981,678 

374,370 

110,809 


8,604,051 


103,774 


103,774 


Number 

offish 

purchased. 


27,175 

11,602 
136,597 

80,574 
842,127 

60,143 


1,158,218 


1,017,042 
547,261 
784,503 
168,584 
439,900 
59,352 


3,016,642 


46,619 
131,998 
505,937 
677,485 
310,216 
349,348 


2,331,819 


540,248 

1,821,558 

4,772,128 

607 


7,134,541 


289,663 
160,465 
2,29<',478 
1,887,278 
358,255 
106,973 


6,099,112 


102,117 


102,117 


Percent- 
age of 
fish 
canned 
which 
were 
pur- 
chased. 


24.39 
45.52 
92.12 
44.62 
97.31 
99.15 


83.66 


6.13 
39.43 
48.70 

6.50 

56.73 

100.00 


13.28 


11.83 
43.22 
49.67 
61.62 
89.50 
100.09 


66.38 


13.00 
44.39 
38.89 


31.99 


25.30 
48.41 
62.72 
63.29 
95.69 
96.53 


59.26 


98.40 


98.40 


Number 
of  cases 
packed. 


26,003 
5,854 
34,344 
25,606 
265,376 
18,607 


375,790 


1,223,950 

118,891 

123,767 

198,205 

67,334 

4,645 


1,736,792 


36,078 
37,275 
117,422 
110,658 
42,782 
34,937 


379, 152 


214,482 

212,169 

879,963 

70,979 


1,377,583 


97,528 
37,870 
344,213 
387,373 
62,043 
16,896 


945,923 


16,991 


16,991 


Ayeiftge 

number 

offish 

percas0. 


1  Coastal  streams  in  Washington,  Oregon,  and  California. 


4.28 
4.35 
4.  SI 
7.05 
3.26 
3.2S 


3.78 


13.52 
11.67 
13.00 
13.04 
11.52 
12.78 


13.24 


ia92 
8.19 
8.60 
0.93 
8.10 

9.  lltf 


9.36 


19.36 
19.33 
13.93 
25.37 


16.10 


11.74 
8.75 

10.63 
7.70 
6.34 
6.56 


9.10 


6.10 


6.10 


16 


KBPORT  ON  CANIOID  FOODS. 


TMm  l-NUMBER  OF  FISH  CANNED  AND  PURCHASED;  NUMBER  OF  CASES  PACKED 
AND  AVERAGE  NUMBER  OF  FISH  PER  CASE-Continued. 


1917 


DtotiM. 

Omle  offish. 

Num- 
ber of 
com- 
panies 
report- 

Number 

offish 

canned. 

Number 

offish 

purchased. 

Percent- 
age of 
fish 
canned 
which 
were 
pur- 
chased. 

Number 
of  cases 
patked. 

.\verag© 

number 

offish 

per  case. 

WestAtek* ,, 

Central  Alaska 

Kings 

do 

do 

do 

8  107,590 

9  34, 15S 
m          2^3,643 
IS          209,360 
10          95'.»,R4fi 

9            45,378 

18,407 

19,872 

202,693 

105,731 

643,063 

43,468 

17.10 
.=18. 19 
71.46 
00.54 
6.99 
95.75 

21,398 
6,675 
45,674 
53,485 
273,291 
12,940 

5.03 
5.11 

Southeast  .\laskB 

Pufjet  Sound 

6.21 
3.91 

Columbia  River 

Ou'taid©  Rivers  1 

do , .... 

Reds 

do 

.....do 

do 

do 

3.51 
2.30 

Totals  and  a  veragis. 

76       1,(539,976 

l,a33,234- 

63.00 

413,463 

3.96 

West  Alaska 

9 
9 

m 

27' 
7 
2 

2I,44P,913 
2,271,989 
1,9()4,9'J3 
4,731,8r.l 
1,213,887 
21,8f.8 

1,192,000 

974,  f>5Z 

1,074,6.^8 

1,233,489 

68S,637 
21,868 

5.56 
42.89 
54.  95 
2fk00 
56.72 
100.00 

1,433,780 

189,921 

15X,5y2 

372,467 

98,076 

1,769 

14.90 

Central  .1  laska 

Booth "ast  -V  lasl.a ... 

PuRct  Sound 

Columbia  River , . . 

11.96 
12.03 
12.73 
12.36 

Outside  Rivers  I 

do. 

Medium  Reds. 

do 

do..., 

—  .do 

*     H»     «     ■     «' \Jt  *iiF  ■    #lliilir*SII|i*» 

do 

12.36 

Totals  and  a  verat^es. 

87 

31,064,511 

5,185,305 

16.40 

2,254,595 

14. 13 

m*est>laska 

Central  .\lasl a : 

Southeast  Alaska 

Puget  Sound 

Columbia  River. 

Outside  Rivers  • 

3 
9 
31 
27 
10 
10 

145,837 

23S572 

1,033,3:J9 

W3,2fi9 

72S,22l 
StM,  779 

18,386 
141,424 
4h\04fi 
501,857 
587,879 
376,224 

12. 60 
59.29 
40. 55 
73.90 
SO.  72 
95.  29 

13,40*^ 
30,430 
9S,324 
91,991 
47,861 
34,417 

10.87 

7.84 
10.51 

S.  84 
15.11 
11.48 

Totaband  avwaiges. 
West  Alaska...- 

92 

3,349,017 

2,044,815 

61.  Ojj 

316,429 

10.58 

I^inks 

2 
10 
33 

1 

1 

3,95S,3nl 

5,221, '-87 

24,166,834 

11,8(«,693 

77,081 
62,892 

1,175,748 

2,172,476 

10,473,74!' 

b, 361, KOI 

14,635 

t.2,892 

2-1 70 
41.62 
43.30 

5:^  ^n 
1 

100.  w 

?19,50.S 

324,230 

1,3132,187 

85.S,39tj 

4,761 

4,222 

18.03 

Central  Alaska 

do 

16.11 

Southeast  Alaska 

do 

17. 26 

Puget  Sound 

Columbia  River 

Outside  Rivers*. , 

do 

do 

do 

Chums... 

do 

13.68 
16.21 
14.89 

Totals  and  averages . 

73 

45,292,778 

20,201,390 

44.90 

2,773,304 

16.29 

West  Alaska 

9 

m 
» 

27 

8 
7 

527,982 

72>,514 

4,0.'<7,578 

2,547,457 

2'/7,R36 
88,736 

194,962 

41^^,419 

2,554,'>«8 

1,852,350 

123,436 

84.413 

.36. 92 

54.215 

9.74 

Central  Alask  a 

.^7.43            79.208 

9.20 

Sootheast  .Vlask  a 

Poitct  Soimd 

do 

do 

62.49 
72.71 
44.42 
95.12 

480,895 

249,  .390 

28,aS5 

11,655 

8.50 
10.22 

Columbia  River 

9.  89 

O'utside  Rivers  •» , . . . 

do 

0' 

7.61 

Totals  and  averwes. 

119 

8,258,103 

5,228,548 

C3.31 

903,448 

9.14 

Stoelheads..',. 

do 

do 

Puget  Sound , . . 

Columbia  River 

Outside  Rivers » 

1 

10 
1 

33 

138,421 
787 

33 

145,581 

787 

100.00 
105.01 
100.00 

5 

22,234 

126 

6.60 
6.71 
6.24 

Totals  and  avenges. 

12 

139,241 

14«,401 

106.00 

22,365 

6.22 

HBFOBT  OK  CANNED  FOODS. 


17 


>  CoAstal  streams  in  Washington,  Oregon,  and  California. 

Til©  red  salmon  run  between  June  and  September.  In  the  Puget 
Sound  district  this  species  is  called  sockeye,  and  has  its  largest  rim 
every  fourth  year,  in  the  year  following  leap  year.  In  1917,  however, 
the  We  ran  that  wm  anticipated  failed  to  materialize.  This 
seasonal  run  is  shown  by  the  fact  that  in  12  years,  from  1902  to  1913, 
the  average  pack  on  Puget  Sound  was  reported  as  889,764  cases, 
but  in  the  three  big  run  years  the  average  pack  was  reported  as 
1,778,351  cases.  The  Fraser  River  in  Britisn  Columbia  is  the  greatest 
sockeye  stream.  The  meat  of  this  species,  which  is  red  and  firm, 
is  in  great  demand,  and  sells  for  the  highest  price  of  any  grade  of 
canned  salmon  except  the  Columbia  River  chinook.    There  is  a  loss 


of  over  30  per  cent  m  weight  in  the  canning  of  the  red  species.    (See 

fiec.  2  of  Chap.  III.)  ^       ,  .         ^  i.#      .     ^     tit    i. 

The  Chinook  or  king  salmon  is  found  from  Califorma  to  Norton 
Sound,  Alaska,  and  in  Asiatic  waters  as  far  south  as  Chma.  It  is 
the  largest  of  the  sahnon.  The  Bureau  of  Fisheries  gives  tMs  specif 
an  average  weight  of  22  pounds,  although  in  some  cases  the  fash  weigli 
as  much  as  100  pounds.  Table  2  shows  that  the  great  bulk  of  this 
species  is  canned  on  the  Columbia  River.  The  average  number  of 
fish  required  to  fill  a  case  of  48  pounds  was  3.73  m  1916,  and  3.96 
in  1917,  there  being  a  waste  of  between  40  and  45  per  cent  m  the 
canning  process,  'fiie  fish  were  larger  in  the  Columbia  River  and  m 
the  outside  streams,  and  smaller  in  the  Alaskan  waters. 

The  flesh  of  the  chinook  sahnon  is  sometimes  white,  but  generally 
a  deep  red.  It  is  highly  prized  commercially.  The  Columbia  River 
chinook  commands  a  higher  price  than  the  Alaska  king  salmon. 

In  CaUfornia  there  are  two  runs  of  this  species.  In  the  Columbia 
River  there  are  three  runs:  January  to  March;  May  to  the  first  of 
July;  and  late  July  to  the  first  of  October.  In  Puget  Sound  and 
Southeast  Alaska  they  are  found  the  year  around,  but  m  Puget  Sound 
they  are  plentiful  only  during  the  spawning  season.  They  are  caught 
in  southeast  Alaska  m  May  and  June,  and  from  August  to  October. 
In  west  Alaska,  they  run  ui  May  and  June.  ,  ,    ,,  ^i. 

The  medium  red  or  coho  is  found  in  Cahforma,  and  to  the  ^oft*i- 
Its  flesh  is  not  a  clear  red,  and  it  is  less  prized  than  that  of  the  red 
or  chinook,  but  is  more  in  demand  than  the  pink  or  chum  species. 
The  medium  red,  weighing  on  the  average  6  pounds,  is  larger 
than  the  red.  The  average  number  reqmred  to  fill  a  case  was 
9  26  in  1916  and  10.58  in  1917.  There  was  a  waste  m  canmng  of 
13.6  per  cent  in  1916  and  24.4  per  cent  in  1917.  This  fish  frequently 
runs  alone,  and  being  suspicious  of  nets  is  caught  m  relatively  small 
quantities.  This  species  is  relatively  unimportant,  except  m  Southeast 
Alaska,  on  Puget  Sound,  and  in  the  Outside  Rivers.* 

The  pink  is  the  smallest  of  American  sahnon,  with  an  average 
weight  of  4  poimds.  Between  16  and  17  fish  are  required  to  fill  a 
case.  It  is  of  commercial  unportance  from  Puget  Sound  north,  bemg 
canned  in  largest  quantities  m  Southeast  Alaska.  It  runs  froin  June 
until  late  fall.  The  flesh  is  pale  in  color  and  not  as  firm  as  that  of 
the  other  species.  It  is  not  especially  prized,  and  in  the  past  it  has 
been  difficult  to  market.  However,  from  the  pomt  of  view  of 
quantity,  pmk  salmon  is  very  unportant.  More  pmk  sahnon  was 
canned  than  any  other  species  in  1917.  The  waste  m  canmng  this 
species  was  about  25  per  cent.  ,    ,       • 

The  chum  sahnon  is  found  from  San  Francisco  north,  but  is  most 
plentiful  from  Puget  Sound  to  Southeast  Alaska.  The  Bureau  of 
Fisheries  reports  an  average  weight  of  8  pounds  for  this  species. 
It  requires  between  9  and  10  fish  to  fill  a  case;  the  waste  m  cannmff 
is  about  34  per  cent.    The  bulk  of  the  pack  comes  from  Puget  Sound 

and  Southeast  Alaska.  ,  . ,    ,      i    x  • 

The  steelhead  trout  is  found  as  far  north  as  Central  Alaska,  but  is 
caught  principally  in  the  Columbia  River.  It  is  sold  prmcipally  for 
the  fresh  and  frozen  markets,  but  some  is  canned  on  the  Columbia 
River.    The  ,waste  in  canning  this  species  is  about  22  per  cent. 

»  Small  coastal  streams  in  Washington,  Oregon,  and  California. 
97684—19 2 


I 


18 


BBPOBT  OK  CANNED  FOODS* 


3.    Xethods  of  catcMnfif  salmon. 

Sftlinoii,  for  commercial  purpo303,  are  caught  principally  in  nets, 
seines,  and  traps.  Traps  or  pound  nets  were  introauced  on  the 
Columbia  River  in  1879,  and  have  since  come  to  be  very  widely  used. 
They  are  especially  important  in  Puget  Sound  and  in  Southeast 
Alaska.  The  number  of  good  trap  locations  is  Umited.  In  order  to 
be  successful,  traps  must  be  placed  where  fish  run  more  or  less 
wgularly  in  large  numbers,  as  in  the  straights  or  ** narrows"  through 
wmch  the  fish  pass  to  reach  their  spawning  grounds.  As  such 
locations  are  Hmited  in  number,  they  have  come  to  be  very  valuable; 
the  canner  who  has  several  good  trap  locations  has  a  ^reat  advantage 
over  the  canner  who  must  purchase  his  fish,  or  catch  them  in  poor 
locations  or  by  more  expensive  methods.  In  some  sections,  notably 
in  the  Puget  Sound  district,  this  has  led  to  a  wide  variation  in  the 
fish  costs  of  competing  canners.  Traps  have  changed  hands  at 
prices  much  above  the  cost  of  construction;  many  canners  in  Puget 
Sound  and  Southeast  Alaska  carry  trap  locations  on  their  books  as 
assets  at  large  figures. 

Table  3.-VALITATI0N  OF   TRAP  SITES-NUMBER  OF  COMPANIES  REPORTING,  BY 

DISTRICTS,  FOR  1916  AND  1917. 


Dlstiicft. 


.PugBt  .Sowicl... 

BouttMSt  Alasloi 

Centml  Alasfca 

'ColumUB  .Elver.. 

O'utside  RiTera 

W«rt  Ateka 

Total  and  aToiage 


1916 


Number 
of  com- 
panies 
report^ 
ingmt 
trap 
Tttlae. 


12 

6 

11 

11 

9 


76 


Number 
of  com- 
panies 
report- 

Ingtr^ 
value. 


11 

15 

2 

1 
B 


Per  cent 
of  com- 
panies 
report- 
in?  trap 
value. 


47.8 

25.0 

8.8 

21.4 


29.9 


Total  trap 

value 
reported. 


11,605,142.14 
773,837.73 
160,000.00 
31,735.00 
4,175.00 


2,574,889.87 


Average 

per 

company 

reportiniif 

trap 

value. 


1145,922.01 

51.589. 18 

80,000.00 

81,735.00 

l,391.6d 


80,465.31 


e.|,-it  at ill 
IKfllil. 


Puget  Sound 

Soutbuasl  .Alaska^ 

Ciiiitn]  Alaska. 

CSolumbia  River 

O'utilde  .Rivers 

W^wt  Alaska 

Total  and  average 


1917 


Number 
of  com- 
panies 
report- 
ing no 
trap 
value. 


21 
26 
8 
14 
1« 
10 


Number 
of  com- 
panies 
report- 
ing trap^ 
value. 


11 

15 

2 

1 

S 


82 


Per  cent 
of  com- 
panies 
report- 
in?  trap 
value. 


34.3 
36.5 
20.0 
6.6 
17.7 


i9liif«i'iB' 


Total  trap 

value 
reported. 


11,546,142.14 

l,2l.%337.65 

160,000.00 

32,0/5.00 

2,705.00 


2,956,259.79 


Average 

I>er 
company 
reporting 

trap 
value. 


8140, 558. 3a 

81,022.51 

80,000.00 

32,075.00 

901.67 


92,383.12 


Table  3  shows  that  the  total  amount  of  such  "valuations"  re- 
ported in  1917  was  $2,956,269.79,  while  $2,574,889.87  was  reported 
im  1916.  Of  the  amount  reported  in  1917,  $1,546,142.14  was  reported 
in  Puget  Sound  and  $1,215,337.65  in  Southeast  Alaska.    Trap  values 


BEPORT  ON  CANNED  FOODS. 


19 


on  the  books  of  the  Central  Alaska,  Columbia  Kiver,  and  Outside 
River  canners  were  relatively  small,  while  none  were  reported  by  West 
Alaska  canners.  In  making  up  this  table  the  canning  companies 
were  placed  in  the  districts  in  which  they  packed  the  lai^est  number 
of  cases.  While  the  schedules  did  not  indicate  in  which  section 
the  traps  were  actually  located,  it  is  clear  that  practically  all  of  such 
"values"  were  represented  by  traps  in  Puget  Sound  and  Southeast 
Alaska.  Of  the  companies  reporting,  32  carried  their  trap  sites  as 
assets.  This  was  29.9  per  cent  of  the  companies  reporting  for  1916, 
and  27.8  per  cent  for  1917.  Evidently  the  new  companies  did  not 
have  desirable  locations,  or  if  they  had  them,  they  did  not  capitalize 
them.  In  the  Puget  Sound  district,  11  companies  reported  valuations 
for  their  trap  sites— this  represented  47.8  per  cent  of  the  companies 
reporting  from  this  district  in  1916  and  34.3  per  cent  in  1917.  In 
Southeast  Alaska  15  companies,  in  Central  Alaska  2  companies,  in  Out- 
side Rivers  3  companies,  and  in  Columbia  River  1  company  reported 
such  "values,"  while  in  West  Alaska  no  such  "value"  was  reported. 

Since  the  licenses  paid  for  these  trap  locations  are  nominal,  it  is 
extremely  doubtful  if  such  sites  should  be  carried  as  assets.  In 
determining  the  investment  of  salmon  canning  companies  for  the  pur- 
poses of  cdculating  profits  on  investment,  book  valuations  of  trap 
sites  were  excluded,  and  only  items  of  actual  cost  were  allowed. 

In  Alaska,  fish  traps  may  be  operated  300  yards  from  the  mouth 
of  any  salmon  stream  and  along  the  shores  of  all  rivers  over  500 
feet  wide,  except  the  streams  emptying  into  Cook  Inlet,  the  streams 
on  Afognak  Island,  and  Wood  Kiver.  A  clear-water  distance  of 
6Q0  yards  laterally  and  100  yards  endwise  must  be  maintained 
between  all  traps.  There  is  no  Ihnitation  on  length  of  "leads"  or 
depth  of  water  into  which  piles  may  be  driven. 

In  Washington,  licenses  for  trap  sites  are  good  for  four  years,  but 
in  Alaska  the  first  on  the  ground  can  build  a  trap.  As  the  piling 
has  to  be  piilled  at  the  end  of  the  season  in  these  northern  waters, 
due  to  the  heavy  ice,  it  would  appear  that  all  locations  would  be 
open  each  year.  However,  trap  sites  once  recognized  as  the  prop- 
erty of  an  individual  are  seldom  "jumped,"  as  long  as  he  maintains 
a  trap  there. 

Section  4.  Fish  pnrcliased  and  canglit  by  canners. 

Some  salmon  canners  employ  fishermen  to  catch  the  fish  needed 
to  operate  their  plants;  others  buy  fish  from  fishermen  operating 
independently,  while  still  others  catch  a  part  of  their  supply 
and  pm-chase  the  remainder  from  fishermen.  The  older  fishing 
sections  have  more  independent  fishermen,  and  the  canners  in  these 
sections  are  more  dependent  upon  purchased  fish.  Thus,  during 
1917,  the  canners  located  on  the  "outside  rivers"  (Klamath,  Rogue, 
Quinnalt,  Sacramento,  Smith,  and  other  streams  emptying  directly 
into  the  Pacific)  purchased  all  of  the  reds,  medium  reds,  and  chums. 
The  Columbia  River,  Puget  Sound,  Southeast  and  Central  Alaska 

E ackers  also  buy  a  large  part  of  the  fish  canned.  In  Western  Alaska 
owever,  where  the  population  is  sparse  and  canneries  are  located 
too  far  away  for  the  small  fisherman  to  venture,  the  canners  catch 
most  of  the  fish  themselves.  The  number  of  fish  canned,  the  number 
purchased,  and  the  percentage  of  the  total  bought  are  shown  by  dis- 
tricts in  Table  4.    Since  these  figures  were  reported  by  companies 


20 


KBPOBT  OK  CAlOflD  FOODS. 


and  not  by  plants,  they  do  not  in  all  cases  accurately  reflect  condi- 
tions. For  instance,  a  finn  having  its  major  operations  in  West 
Alaska  may  also  have  a  plant  on  Puget  Sound;  in  such  a  case  fish 
purchased  on  Puget  Sound  appear  to  have  been  purchased  in  West 
Alaska,  according  to  the  table.  Similarly,  a  firm  having  its  operations 
nrincipally  on  Puget  Sound  may  also  have  plants  in  Alaska,  where 
fish  are  caught  by  the  canning  company  itself,  and  yet  in  this  table 
they  appear  as  being  caught  in  Puget  Sound.  It  is  beheved  that 
these  errors  are  only  partly  compensating. 

Table  4.-XUMBKR    OF    FISH    CANNED    AND    PURCHASED/    WITH    PEHCENTAOBa 

FUBCHASED  BY  DISTRICTS:  1916  AND  1917. 


1916 

1917 

Dtotnrt. 

Number  lish 

canned. 

Numbor  fish 
purolmsed. 

Per  cent 
fish  pur- 
ehftfied. 

Number  fish 
canned. 

Number  fish 
purchased. 

Per  cent 
fish  pur- 
chased. 

West  Alaska 

22,367,790 
a,lfi2,674 

18,703,83:1 

6,  aw,  547 

2.465,515 

579,870 

1,920,747 

2,672,884 
8.495.fi43 
2,814,528 
2,052.615 
575,816 

8.6 
43.4 
45.4 
12.3 
83.3 
99.3 

26,189,713 

8.495.120 

31,536,3.S7 

20.107.673 

3,  .'195,292 

614,440 

2,599,502 

3,726,844 

14.725.113 

10,055,351 

2,190,231 

589,652 

9.9 
4S.9 

■Cwilial,  Alaska 

8oii.tlMast  Alaska 

F'Ujjrt  Sdimd 

46.7 
SO  0 

CopimWa  Riirw 

OntaldelliTaBs.. 

64.fi 
96.0 

Total 

58,925,129 

18,532,233 

31.5 

90.338,625 

33,886,693 

37.6 

1  The  number  offish  sliown  m  this  table  Is  not  the  exact  numl)er  canned  or  purchased^as  a  few  com  panics 
did  not  make  this  distinction  in  answering  this  question.  However,  it  is  believed  that  the  omissions 
would  not  materially  affect  the  percentages  of  fish  purchased. 

Considering  all  species  of  fish,  onlv  8.6  per  cent  of  the  fish  canned 
by  West  AlasKa  packers  in  1916  and  9.9  per  cent  in  1917  were  pur- 
chased, compared  with  99.3  per  cent  purchased  by  Outside  River  can- 
ners  in  1916  and  96  per  cent  in  1917.  Columbia  River  packers  after 
Outside  River  packers  are  next  most  dependent  on  commercial  fisher- 
men for  their  raw  fish,  purchasing  83.3  per  cent  of  all  those  canned 
in  1916  and  64.5  per  cent  in  1917.  The  total  percentage  purchased 
by  all  American  canners  was  31.5  in  1916  and  37.5  in  1917. 

Table  2  shows  that  the  canners  bought  more  steelheads  than  were 
canned  in  1917;  the  surplus  was  evidently  sold  in  the  fresh  market. 
The  smallest  percentage  of  any  species  purchased  was  13.3  per  cent 
of  reds  in  1916  and  16.4  per  cent  m  1917.  The  difference  in  the  per- 
centage of  the  various  species  purchased  depends  not  so  much  on  the 
Mnd  of  fish  as  on  the  section  in  which  the  species  predominates. 

Sectim  5.  Bifflcmlty  in  secnriiig  fish. 

Packers  with  desirable  trap  locations  or  situated  in  sections  where 
fish  are  both  plentiful  and  easily  caught  with  seines  or  nets  have  no 
difficulty  in  securing  an  adequate  supply  of  raw  fish  in  years  when  the 
fish  run  in  large  numbers.  Canners  without  desirable  trap  locations 
and  situated  in  sections  where  the  grounds  are  overrun  with  fishermen 
may  experience  great  difficulty,  however,  in  securing  sufficient  fish 
for  the  economical  operation  of  their  plants.  This  is  especially  true 
of  the  Puget  Sound  district.  Here,  within  recent  years,  the  demand 
for  fish  by  the  canners  and  fresh-fish  dealers  has  been  so  great  and  the 
supply  lias  been  so  limited  that  prices  have  been  forced  up.  Thus 
the  canners  in  this  section  who  depend  upon  independent  fishermen 


HBPOBT  ON  CANNED  FOODS. 


21 


for  their  supplies  must  pay  the  very  high  market  price  for  the  fish. 
The  Puget  Soimd  prices  have  recently  been  much  higher  than  the 
cost  of  catching  or  purchasing  fish  in  Alaska.  One  company,  which 
is  supposed  to  be  typical,  reported  the  following  advances  in  fish 
prices  on  Puget  Soimd  during  1917:  Sockeye  opened  at  50  cents  apiece 
and  closed  at  75  cents;  humpback  opened  at  5  cents  apiece  and  closed 
at  28  cents.  This  has  meant  a  higher  cost  of  production  for  such 
canners  and  has  placed  them  at  a  serious  disadvantage  compared 
with  canners  more  favorably  situated.  There  has  also  been  serious 
competition  for  fish  between  canners  located  on  the  Canadian  and 
American  sides  of  Puget  Sound,  and  complaint  has  been  made  that 
fish  caught  in  American  waters  have  gone  to  Canadian  packers  who 
have  outbid  the  American  canners. 

llie  canners  were  asked  the  following  question:  ''What  difficulties 
in  obtaining  salmon  have  you  encountered  because  of  control  of 
salmon  groimds  by  other  companies  ?"  The  canneries  in  West  Alaska 
imiformly  reported  that  no  trouble  had  been  experienced  in  securing 
fish.     In  the  Central  Alaska  district  very  little  trouble  was  reported. 

In  Southeast  Alaska,  an  older  canning  district  which  is  more 
thickly  settled,  competition  is  keener,  and  about  one-foiu-th  of  the 
firms  experienced  trouble  in  seciu*ing  fish.  Their  trouble  consisted 
largely  of  increased  prices  and  competition.  Among  the  canners 
located  on  the  coastal  streams  of  Oregon,  Washington,  and  California 
only  one-third  of  those  answering  the  question  reported  trouble  in 
securing  raw  fish.  Of  the  15  Columbia  River  canners  answering  the 
question  4  reported  having  trouble.  Twenty-five  of  the  Puget 
Sound  canners  answered  this  question,  of  whom  20  reported  no  diffi- 
culties, 4  complained  of  high  prices  or  scarcity  of  fish,  and  1  feared  a 
shortage  of  labor. 

Aside  from  competition  and  high  prices,  the  difficulties  specified 
were:  obstruction  of  channel  (by  fresh  fish  company),  theft  of  fish 
from  traps,  trouble  with  gill  netters,  controversies  with  United  States 
Department  of  Indian  Affairs,  control  of  tidal  lands  by  lumber  com- 
panies, and  lack  of  permanence  in  tenure  of  trap  and  net  locations. 

Section  6.  The  general  method  of  marketing  canned  salmon. 

Salmon  canners,  like  fruit  and  vegetable  canners,  have  not  as  a  rule 
developed  their  own  sales  organizations  and  are  dependent  upon 
brokers  or  sales  agents  for  the  sale  of  their  goods.  Due  to  the  small 
size  of  the  companies  and  the  limited  number  of  products  manufac- 
tured, this  method  of  marketing  seems  to  be  more  economical  than 
the  maintenance  of  a  sales  force  by  each  canner.  At  any  rate  the 
canner  who  has  a  small  output,  limited  capital,  and  who  is  located  in 
a  section  remote  from  the  large  markets  (as  the  salmon  canner  gen- 
erally is)  is  unable  to  maintain  a  sales  organization  and  must  rely 
upon  others  to  market  his  product. 

Nearly  ail  canned  salmon  passes  through  the  hands  of  brokers  or 
sales  agents.  Ihe  sales  agent,  as  distinguished  from  the  broker,  is  of 
greater  relative  importance  in  the  marketing  of  salmon  than  in  the 
other  branches  of  tne  canning  industr}'.  It  is  shown  in  section  9  of 
this  chapter  that  in  1917,  116  companies  sold  4,934,974  cases  through 
sales  agents  and  1,938,947  cases  through  brokers.  Ihe  amount  sold 
directly  to  jobbers  or  outright  to  brokers  is  not  shown.     The  quantity 


99 


MPOBT  ON  CANNED  FOODS. 


sold  ihrotigh  sales  agents  and  brokers,  however,  was  over  80  per  cent 
of  the  1917  pack,  and  was  larger  than  the  1916  pack,  in  spite  of  the 
fact  that  %ures  for  several  companies  were  not  available. 

It  is  evident,  therefore,  that  sales  for  a  relatively  small  part  of  the 
pack  were  effected  directly  by  the  canners.  As  the  reports  of  the 
brokers  show  that  they  purchased  outright  a  considerable  quantity  of 
salmon  from  the  canners,  it  is  apparent  that  the  canners  sell  a  very 
small  amount  of  salmon  directly  to  the  jobbers  or  wholesalers. 
Tabk}  5  shows  that  in  1917,  out  of  115  companies,  53  sold  their  entire 
output  through  sales  agents,  18  sold  entirely  through  brokers,  and 
only  4  reported  selling  their  entire  packs  directly  to  either  brokers  or 
jobbers. 

Most  of  the  brokers  are  located  on  the  Pacific  coast,  and  Seattle  has 
the  largest  number  of  them.  Very  few  of  them  have  a  selling  organi- 
zation which  extends  over  the  country,  and  consequently  they  have 
to  sell  largely  through  brokers  located  m  the  various  cities  throughout 
the  country,  paying  them  a  sub-brokerage  of  from  2  to  4  per  cent. 
Tlie  ordinary  brokerage  on  canned  salmon  is  5  per  cent,  about  one-half 
of  which  is  paid  to  the  sub-brokers.  Commissions  as  high  as  13i  per 
cent  and  as  low  as  2 J  per  cent,  however,  were  reported.  Several  can- 
ning companies  have  selling  departments  which  dispose  of  their 
output  and  generally  of  the  output  of  one  or  two  other  afiiliated 
packers  through  eastern  brok**!^.  Th^  only  selling  expense  of  these 
companies  in  such  cases  was  the  sub-brokerage.  Sometimes  the  presi- 
dent or  a  member  of  the  firm  acts  as  selling  agent  for  the  eale  of  the 
pack  and  accepts  the  net  brokerage  (the  regSar  brokerage  less  the 
sub-brokerage)  in  lieu  of  a  salary  or  as  a  part  of  it. 

Most  of  the  large  salmon  brokers  own  or  control  directly  one  or 
more  canning  companies,  which  bring  th^m  into  close  touch  with  the 
canners  and  into  sjrmpathy  with  their  interests.  Some  of  the 
brokers,  through  advances  of  money,  through  sales  contracts,  or  in 
other  ways  practicall}^  control  the  output  of  several  canners. 

Hectioi  7.  Tie  importance  of  sales  agrents  and  brokers. 

In  the  salmon  camiing  industry,  a  sales  agent  is  a  broker  who  has 
the  right  to  sell  all  or  a  specified  part  of  a  canner's  output,  or  to  dis- 

Sose  of  all  of  it  except  the  portion  sold  to  certain  persons  or  in  speci- 
ed  places.  Most  of  the-  brokers  acted  as  sales  agents  for  one  or 
more  canners,  and  generally  they  carried  on  at  Sie  same  time  a 
large  brokerage  business  for  canners  for  whom  they  were  not  sales 
agents.  Most  brokers  also  did  some  merchandising  business.  Dur- 
ing  1917  many  sales  were  made  between  brokers. 

Table  5  shows  the  number  of  companies  whicli  sold  their  packs 
through  the  various  trade  chamiels.  Many  canners  do  not  distin- 
guish between  sales  agents  and  brokers  or  between  direct  sales  and 
orokerage  sales.  Many  consider  goods  sold  at  the  opening  price 
through  brokers  or  selling  agents,  upon  which  a  conunission  is  paid, 
as  an  outright  or  a  direct  sale.  This  is  probably  due  to  the  fact 
that  goods  are  **  billed  '  to  the  sales  agent,  who  remits  for  them  (less 
cash  discount  and  brokerage).  The  broker  or  sales  agent,  however, 
is  rot  the  buyer,  but  only  an  agent,  and  he  is  obligated  to  remit  all 
of  the  sales  price  less  discount;  brokerage,  and  expenses  to  the  can- 
ner.     Such  en-ors  were   corrected   when  found   m   the   schedules. 


BEPORT  ON  CANlfED  FOODS. 


23 


Nevertheless,  there  is  still  the  possibihty  that  the  table  is  not  cor- 
rect in  every  detail. 

TABLE  6.-TRADE  CHANNELS  USED  IN  THE  MARKETING  OF  CANNED  SALMON,  1M6 

AND  1917. 


District. 


Canuers  who  sold  through  sales  agents. 


Number 
of  com- 
panies re- 
porting. 


1916. 

Southeast  Alaska 

West  Alaska 

Central  Alaska 

Puget  Sound 

Columbia  River 

Outside  Rivers 

Total  and  average 

1917. 

Southeast  Alaska 

West  Alaska 

Central  Alaska 

Puget  Sound 

Columbia  River 

Outside  Rivers 

Total  and  average 


35 
8 
7 
20 
11 
10 


91 


40 
9 
10 
30 
13 
13 


Entire  pack. 


Number 
com- 
panies. 


19 
5 
2 

12 
3 
4 


115 


45 


19 
5 
5 

16 
2 
6 


Per  cent 
of  total 

number 
com- 
panies. 


54.29 
60.00 
28.57 
60.00 
27.27 
40.00 


Part  of  pack. 


Number 
com- 
panies. 


53 


49.45 


47.50 
55.55 
60.00 
53.34 
15.38 
46.15 


17 


Per  cent 
of  total 
number 
com- 
panies. 


11.43 


28.58 
20.00 
27.27 
40.00 


None  of  pack. 


Number 
com- 
panies. 


46.08 


24 


18.68 


20.00 
11.12 
20.00 
23.33 
38.47 
7.69 


20.87 


12 
3 
S 
4 
5 
2 


29 


13 
3 
3 
7 
« 
0 


Percent 

of  total 
number 
com- 
panies. 


34.28 
40.00 
42.85 
20.00 
45.46 
20.00 


38 


31.87 


32.50 
33.33 
30.00 
23.33 
4&1S 
46.15 


33.05 


District. 


Canners  who  sold  through  brokers. 


Number 
of  com- 
panies re- 
porting 


Entire  pack. 


Number 
com- 
panies. 


1916. 

Southeast  Alaska 

West  Alaska 

Central  Alaska 

Puget  Soimd 

Columbia  River 

Outside  Rivers 

Total  and  average 

1917. 

Southeast  Alaska 

West  Alaska 

Central  Alaska 

Puget  Sound 

Columbia  River 

Outside  Rivers 

Total  and  average 


35 
8 

7 
20 
11 
10 


91 


40 
9 
10 
30 
13 
13 


10 


8 


115 


Per  cent 
of  total 

number 
com- 
panies. 


14.28 


14.28 
20.00 


10.98 


Part  of  pack. 


I 


Number 
com- 
panies. 


11 
2 
3 
3 
6 
5 


Percent 

of  total 
number 
com- 
panies. 


31.43 

25.00 
42.86 
15.00 
54.55 
50.00 


None  of  pack. 


Number 
com- 
panies. 


30 


20.00 


10,00 
13.33 
23.08 
15.38 


11 
3 
2 
8 
5 
3 


18 


15.66 


32 


32.96 


27.60 
33.34 
20.00 
26.67 
38.46 
23.08 


27.82 


19 
6 
3 

13 
5 
5 


51 


Per  cent 
of  total 
number 

panies. 


54.29 
75.00 
42.86 
65.00 
45.45 
50.00 


56.06 


21 
ft 
7 

18 
5 
8 


65 


66.66 
70.00 
60.00 
38.46 
61.54 


56.62 


i 


iilliiliirliiiliiillliillii 


24 


mPOBT  ON  CANNED  FOODS. 


Tawm  S.-TBADB  CHANNBL8  USED  IN  THE  MARKETING  OF  CANNED  SALMON,  191ft 

AND  1917— Continued. 


Number 
of  com- 
panies re- 
porting. 

Canners  who  sold  directly  to  Jobbers  or  brokers. 

Entire  pack. 

Part  of  pack. 

None  of  pack. 

District. 

Number 
com- 
panies. 

Per  cent 
of  total 
number 
com- 
panies. 

Number 
com- 
panies. 

Per  cent 
of  total 

number 
com- 
panies. 

Number 
com- 
panies. 

Per  cent 
of  total 
number 
com- 
panies. 

line. 

84iiit]itt8t  Alaska 

15 
S 

y 

20 

11 

10 

8 
2 
4 
3 

7 
6 

22.85 
25.00 
57.15 
15.00 
63.63 
50.00 

27 
6 
3 

17 
3 
5 

77.15 

W«stA,teiki. , 

CSantral  Alaafca 

1 

1X50 

62.50 
42.86 

FiMBtfldiind 

85.00 

Columbia  River 

1 

9.10 

27  27 

Outside  Risers 

50.00 

Total  and  average 

91 

2 

2.20 

29 

31.86 

60 

65.94 

1917. 

Sontlieast  Alaska 

40 
9 
10 
30 
13 
13 

11 
3 
4 
9 
5 
3 

27.  SO 
33.33 
40.00 
30.00 
38.46 
23.08 

30 
5 
ft 

21 

7 
8 

72.60 

West  Alaska 

1 

11.11 

55  56 

Camtral  Alaska. 

60.00 

Pupt  Sound 

70.00 

Cdlumtola  River 

1 
2 

7.80 
15.38 

53  85 

Outside  Rivers 

61.54 

Total  and  average 

IIS 

4 

3.47 

35 

30. 45 

70 

66.08 

In  1916,  45  companies,  or  49.5  per  cent  of  those  wliich  reported, 
8old  their  entire  outputs  through  sales  agents;  53  companies  or 
46.1  per  cent  of  those  which  reported  in  1917  sold  their  entire 
output  through  sales  agents.  This  might  indicate  a  slight  tendency 
to  Dreak  away  from  the  use  of  exclusive  sales  agents,  but  it  ap- 
pears that  this  decreased  percentage  was  due  to  new  companies 
choosing  other  methods  rather  than  to  old  companies  breaking 
established  connections.  Apparently  the  Puget  Sound  and  West 
Alaska  packers  are  the  most  dependent  upon  sales  agents,  and 
the  Columbia  River  packers  the  least  dependent.  In  1916  there 
W'ere  29  companies,  or  31.9  per  cent  of  the  total  number,  which  in 
1916  made  no  use  of  sales  agents,  and  there  were  17  companies, 
or  18.7  per  cent,  which  sold  a  part  of  their  packs  through  them; 
while  in  1917  there  were  38  companies,  or  33.1  per  cent,  who 
did  not  use  sales  agents,  and  24  companies,  or  20.9  per  cent,  who  sold 
only  a  part  of  their  pack  through  them. 

The  number  of  companies  which  reported  the  sale  of  their  entire 
packs  through  brokera  increased  from  10  companies,  representing 
11  per  cent  of  the  total  number  in  1916,  to  18,  representing  15.7  per 
cent  of  all  the  companies,  in  1917.  The  companies  which  sold  their 
entire  outputs  through  brokers  in  1917,  but  not  in  1916,  apparently 
sold  a  part  of  their  packs  in  this  way  in  1916,  as  very  little  difference 
existea  in  the  percentages  of  companies  which  made  no  use  of 
brokers  in  1916  and  1917. 

The  preceding  table  shows  that  very  few  of  the  salmon  canners 
sold  their  entire  outputs  directly  to  the  jobbers.  Only  4  companies, 
or  3.5  per  cent  of  the  total  number  of  companies,  marketed  their 
entire  outputs  in  this  way  in  1917,  and  only  2  companies  did  so  in 
1916.  About  two- thirds  of  the  reporting  packers  made  no  direct 
sales  and  about  one-third  sold  parts  of  their  packs  themselves. 


BBPOBT  ON  CANNED  FOODS. 


25 


"3^  si 


00 
CO 


0      vT  »-i  a    . 


to 


J3 


O 

p* 

o 


OQ 

55 


u 

O 
CQ 

CQ 

I. 

« 


Q 


QQ 


eiM 


i 

I. 


CO 


o 


I 


60 
09 

2 

I— • 

es 
CO 


n 

I 

S 

9 


JS  o 

o  9. 


i!. 

PkJi  o 


lO 


00 
fH 

»o 

00 


j5  §  *"  « 


SI 


c  ca  ©  s 

©  ©  CJ  , 


Ki 


5^i 


■V  « eg  CO 

CO 


« 


1-1 


00 


i 

© 

T 


eo 


©  ©  C9 

»-  fc.  « 
9  ©  '«a 

P4P.O 


^ 

^ 


00" 


SCO 


§-" 


»o 


3 

u 

It  ^ 

dio  o  e 

©..>•  t-  © 


taeie*eo 


CO 


i^eoeMOs 

Sf  I^CXJ 

cTriJ'eo'r-r 
OON  t»<-i 
esico 


o 


ca 


.OS© 


OQ 


z  § 


00 


g 


e* 


« 


I 

© 


< 


Pk 


s 

© 

•a 
t> 


C8 

g 


m 


o 

0 

%* 

d 

t 

*» 
08 

09 

o 

a 

I 
■% 

1 

A 
9 

I 


B 


o 

CO 

o 

M 

g 


g 

■s 
I 

0 

Xi 


I 


4 


I 


tt 

I 

9 


5 


s 


i 


ti 


UPOBT  OH  OAinOSD  F00I3& 


KEPORT  ON  CANNED  FOODS. 


27 


SMtioB  8.  Bisimess  done  by  the  brokers. 

The  eumber  of  cases  of  canned  salmon  handled  by  27  brokers 
and  sales  agents,  together  with  the  rates  of  brokerage  (or  commission) 
received  during  1917  are  shown  in  Table  6.  Of  these,  18  were 
salmon  brokers  located  on  the  Pacific  Coast,  and  9  were  general 
CfflMied-food  brokers  located  in  various  cities  throughout  the  eastern 
liiilf  of  the  United  States. 

The  18  Pacific  Coast  brokers  were  exclusive  sales  agents  for  69 
canners.  The  number  of  cases  handled  by  them  on  this  basis  was 
4,020,323.  The  9  eastern  brokers  were  exclusive  agents  for  21  can- 
ners and  sold  for  them  697,971  cases.  The  number  of  cases  handled 
by  these  two  groups  of  brokers  as  exclusive  sales  agents  was  equal 
to  69.5  per  cent  of  the  total  number  of  cases  covered  by  this  table. 
The  rate  of  commission  received  on  these  sales  was  generally  5  per 
cent,  although  rates  as  high  as  10  per  cent  and  as  low  as  2  per  cent 
were  reported. 

The  Pacific  Coast  brokers  represented  22  canners  as  nonexclusive 
sales  agents  for  whom  they  sold  564,682  cases.  The  9  eastern  brokers 
were  nonexclusive  sales  agents  for  14  canners  for  whom  they  sold 
81,238  cases.  The  two  groups  of  brokers  together  sold  on  this  basis 
9.5  per  cent  of  the  total  amount  handled.  The  rate  of  commission 
was  generally  5  per  cent,  but  in  some  instances  was  as  low  as  1.5 
per  cent. 

The  Pacific  Coast  brokers  sold  333,321  cases  on  a  straight  broker- 
age basis  at  rates  of  commission  varying  from  1.25  per  cent  to  5  per 
cent.  The  eastern  brokers  handled  168.344  cases  on  the  same  basis, 
for  which  they  received  a  commission  of  from  1.25  per  cent  to  4 
per  cent.  The  number  of  cases  handled  on  a  straight  brokerage 
basis  made  up  over  7.4  per  cent  of  the  total  amount. 

The  Pacific  Coast  brokers  purchased  (outright)  680,457  cases  and  the 
eastern  brokers  purchased  227,982  cases.  These  figures  show  that 
13.5  ner  cent  of  the  total  amount  of  salmon  was  handled  on  a  mer- 
chandising or  a  buy-and-sell  basis. 

The  average  number  of  cases  handled  by  the  18  coast  brokers 
was  311,874  per  company,  as  compared  with  an  average  of  130,615 
per  company  for  the  eastern  brokers.  As  the  Pacific  Coast  brokers  pur- 
chased outright  an  average  of  37,803  cases  per  company  and  the  east- 
em  brokers  an  average  of  25,331  cases,  it  is  evident  that  the  latter  did 
a  relatively  larger  buy-and-sell  business  in  salmon  than  the  Pacific 
Co.a8t  brokers. 

« 

Sectioi  9.   Tbe   oftimers'  metbod  of  distributing  tbeir  goods— sales 
agents  and  brokers. 

In  1917  the  total  number  of  cases  packed  and  purchased  by  the 
116  companies  reporting  was  8,105,028,  while  in  1916,  5,700,602  cases 
were  packed  by  the  91  companies  reporting  (217,807  cases  were 
reported  as  purchased  by  canners  for  resale  in  1917;  this  information 
was  not  procured  for  1916). 

The  number  of  cases  sold  through  sales  agents  and  brokers  with 
rates  of  commission  paid  are  shown  in  Table  7. 


Table  7.-CANNERS'  DISTRIBUTION  OF  THEIR  SALMON  PACKS  IN  1916  AND  1917;- 
NUMBER  OF  CASES  SOLD  THROUGH  SALES  AGENTS  AND  BROKERS  WITH  RATE^ 
OF  COMMISSION  PAID. 


District. 


1916 


West  Alaska 

Central  Alaska.... 
Southeast  Alaska. 

Pupet  Sound 

Columbia  River. . . 
■Outside  Rivers — 


Total  and  averages. 


West  Alaska 

Central  Alaska... 
Southern  Alaska. 

Pupet  Sound 

Columbia  River.. 
Outside  Rivers... 


1917 


Total  and  averages. 


District. 


1918 


West  Alaska 

Central  Alaska — 
Southeast  Alaska. 

Pugct  Sound 

Columbia  River . . 
Outside  Rivers... 


Total  and  averages. 


1917 


West  Alaska 

Central  .\laska.... 
Southeast  Alaska. 

Paget  Sound 

Columbia  River.. 
Outside  Rivers... 


Total  and  averages. 


Total 
number 
com- 
panies 
report- 
ing. 


Sold  through  sales  agents. 


8 
7 

35 
19 
12 
10 


91 


9 
10 
40 
31 
13 
13 


Total 

number 

cases. 


Per  cent 
sold  at 
5  per  cent 
commis- 
sion. 


1,864,548  i 

405,038 

1,386,827  I 

1,120,042 

142,122 

31,277 


13.9 
52.0 

«85.2 
86.6 
47.6 

100.0 


Per  cent 
sold  at 
4  per  cent 
commis- 
sion. 


86.1 


Per  cent 
sold  at 
2i  per 
cent  com- 
mission. 


0.3 

8.9 
2.8 


Per  cent 

on  which 
rate  of 
commis- 
sion w% 

not 
stated.* 


116 


4,949,854 


1,495,572 

478,825 

1,809,629 

1,012,061 

123,047 

15,840 


4,934,974 


55.0 


13.0 

58.6 

*88.7 

6  82.7 

53.5 

100.0 


32.4 


84.6 


60.7 


25.7 


3.2 


S34.1 
8.6 
3.1 


7.1 


47.7 
5.9 

10.6 
52.4 


9.4 


2.4 

7.3 

2.7 

14.2 

46.5 


ft.  5 


Total 
number 
com- 
panies 
report- 
ing. 


Sold  through  brokers. 


8 
7 
35 
19 
12 
10 


91 


9 
10 
40 
31 
13 
13 


Total 

number 

cases. 


122,315 
62,051 
867,408 
256,409 
210,103 
57,604 


116 


1,575,890 


97,658 

48,534 

974,374 

348,518 

438,424 

31,439 


Per  cent 

sold  at 

5  per  cent 

conunis- 

sion. 


39.2 
1.6 
48.9 
11.0 
24.0 
100.0 


Per  cent 
sold  at 
2i  per 
cent  com- 
mission. 


Per  cent 
on  which 
rate  of 
commis- 
sion was 

not 
stated.  1 


38.6 


51.9 


I- 1 
1.2 


60.S 
98.4 
50.0 
87.8 
76.0 


.9 


29.9 
32.2 
65.4 
80.4 


7.0 
4.3 


19.6 


1,938,947  I       39.5 


6a5 


48.1 
100.0 
63.1 
63.5 
34.6 


55.9 


1  In  most  instances  only  the  total  commission  or  brokerage  paid  was  reported;  however,  this  generally 
amoimted  to  about  5  percent  on  sales. 
» 100,420  cases  at  10  per  cent  commission  are  mcluded. 
» 162,049  cases  at  3  per  cent  commission  are  included. 
*  110,674  cases  at  10  per  cent  commission  are  included. 
6 10,848  cases  at  13J  per  cent  commission  are  included. 


I 


I 


.J.  -I— —Ma 


mm 


BBPOET  OH  OASnrBD  POODS. 


M  1917,  4,934,974  cases  were  sold  through  sales  agents.  A  com- 
mission of  5  per  cent  was  paid  by  the  canners  on  about  three-fifths 
of  this  amount.  On  about  one-quarter  of  it  (sold  by  a  company 
in  the  West  Alaska  district),  a  4  per  cent  commission  was  paid. 
On  7.1  per  cent  of  these  sales  the  rate  of  commission  was  2i  per  cent, 
while  on  6.5  p«r  cent  of  them  the  rate  of  commission  was  not  stated, 
but  was  probably  5  per  cent  in  most  instances.  In  1916  a  com- 
mission of  5  per  cent  was  paid  on  more  than  one-half  of  the  total 
amount  sold  through  sales  agents;  4  per  cent  was  paid  on  nearly  one 
third;  2i  per  cent  was  paid  on  a  very  small  amount  (only  3  2  per 
cent  of  total).  ^ 

The  amount  sold  on  a  brokerage  basis  was  1,938,947  cases  in  1917 
and  1,575,890  cases  in  1916.  This  represented  275  brokerage  trans- 
actions in  1917  and  295  transactions  in  1916.  In  1917  a  5  per  cent 
commission  was  paid  on  about  two-fifths  of  the  amount  sold  through 
brokers;  on  less  than  one-twentieth  of  this  amount  a  2 J  per  cent  com- 
mission was  paid.  The  brokerage  paid  on  55.9  per  cent  of  the  sales  was 
not  stated,  but  apparently  averaged  5  per  cent.  In  1916  the  amount 
upon  which  a  5  per  cent  brokerage  was  paid  was  608,175  cases 
(nearly  two-fifths  of  the  total).  The  amount  upon  which  2i  per  cent 
was  paid  was  less  than  1  per  cent  of  the  total,  while  the  rate  of 
brokerage  paid  on  three-fifths  of  the  sales  was  not  stated. 

This  table  estabhshed  two  points  clearly:  (1)  The  larger  part  of 
the  canned  salmon  passes  through  the  hands  of  the  exclusive  sell- 
ing agents;  (2)  5  per  cent  is  the  prevailing  rate  of  commission  paid 
both  to  selling  agents  and  to  brokers. 

Section  10.  labels  used  on  canned  salmon. 

The  labels  or  brands  under  which  a  canned  food  is  sold  are  valuable 
to  the  consumer  as  guides  to  the  quahty  of  the  contents  and  to  the 
seller  as  an  aid  m  the  marketing  of  his  product.  If  a  label  is  widely 
and  favorably  known,  it  is  very  valuable  to  the  person  who  controls 
Its  use.  Many  canned  goods  have  come  to  be  sold  under  the  broker's 
or  jobber's  label,  so  that  the  canner  is  unknown  to  the  consumer  and 
gets  no  credit  for  a  high  quality. 

The  number  of  cases  sold  in  1917  under  packers'  labels,  jobbers' 
labels,  brokers'  labels,  and  unlabeled  are  shown  in  Table  8.  This 
shows  that  on  the  average  70  per  cent  of  the  total  quantity  mar- 
keted was  sold  under  packers'  labels.  The  largest  percentage 
was  m  the  West  Alaska  district,  where  91  per  cent  was  marketed 
under  the  packers'  label.  This  is  significant  when  it  is  remembered 
that  the  larger  companies  are  located  in  this  district.  The  smallest 
percentage  was  in  the  Puget  Sound  section,  where  only  50  per  cent  of 
the  salmon  marketed  bore  the  packers'  labels,  and  '5  per  cent  was 
labeled  after  leaving  Backers'  hands.  The  brokers'  labels  were  used 
on  25.5  per  cent  of  tne  total  from  this  district. 


% 

D 

00 

P5 

o 

« 

Q 

s 

pa 
n 
o 


« 

o 
< 

c 

< 

V. 

o 
ti 

Pk 

c 
■Jz: 
-< 

a 

S3 

u 

% 

1 

o 

< 
m 

O 

< 
G 

2; 
o 

ft 

CO 

& 

QQ 

< 


00 

H 

.4 

< 


BEPORT  ON  CANISTED  FOODS. 


29 


es 

■a 


o 
m 


a  . 

go 


QD 

■ 

C4 


O  C«  t>.  lO  00  ■* 
WtDQCMNQ 
CO  ^  «0  "<*••-•  00 


co>-< 


IB 

o 


§ 


o 


11 


tH  CO  >0  r-^  >0  u6 


S5S 


«  CO  0»  »-<  N  00 

e<5  >-i  op  D«  to  S5 


ic 


CO 


s 

•g 

r 

o 


s 


_  © 
go) 


04  r-*f-i<x)0>*a 

•    ••••> 


S3  . 
B  w 

I" 


t*  IC  «0  •-<  rl  t>- 
01  r^C* 


S 

u 


o 
m 


«  0 

p  bfi 


^OOfHOO 

S  o»  r*  t- 1-  S 


Is 
Is 


e*: »- o  iM  (N  a< 

•-HOC  »oco or  o 

CONQOO'T  »0 

co«5eo      cot^ 


a 


g  M  a> 


com  t^"5 

1-H  t^  CSI  -rt<  10  N 

(NC^ecmocoo 

QuftDOOeiSO 
•"♦©■iO        •O'W 

0^  p^  ^H 


to  c 


3  s  «  s 


■^OSOSNNQO 


■c 


s 


s 


I* 


o 
o 


^ 


g 


(M 


i 

CO 


«o 

IN 

O 

»o 
to 


1»* 
o 


OS 

i^  (mt:  c+j 
S  *?  is 'S  3  ® 

Cb-  »X  Op 


CO 

2 

eS 


g. 


a 


-a 


u 
o 

Xi 

•h> 

O) 

09 

Oi 
CO 
03 
U 

CO 

s 


I 


f3 


01 


I 


CIS 


8 

g 
g 


OS 


80 


OBT  ON   CANNED  FOODS. 


Only  11.7  per  cent  of  the  caimed  salmon  was  sold  under  the  jobbers'  * 
labels,  the  highest  relative  amounts  sold  under  such  labels  being  sold 
by  the  Colimabia  River  and  Puget  Sound  packers. 

The  brokei-s  placed  their  labels  on  15.7  per  cent  of  the  total.  How- 
ever, 25.5  per  cent  of  the  total  reported  by  Puget  Sound  canners  and 
21.4  per  cent  from  Southeast  Alaska,  were  sold  under  brokers'  labels. 
On  the  other  hand,  only  3.1  per  cent  from  West  Alaska  and  5  per  cent 
from  Columbia  River  carried  the  brokers'  brands.  This  indicates 
that  the  brokers'  labels  are  more  important  in  marketing  canned 
salmon  than  in  the  sale  of  canned  vegetables.^  Figures  for  a  large 
Seattle  brokerage  firm  show  that  21.9  per  cent  of  the  total  salmon 
handled  by  them  in  1916  and  24.2  per  cent  in  1917  bore  their  own 
labels. 

This  table  shows  that  only  174,456  cases,  or  2.6  per  cent  of  the 
total  sales  in  1917,  left  the  packers'  hands  unlabeled.  These  figures, 
however,  may  be  too  small,  as  this  information  was  not  specifically 
called  for  m  the  schedule,  and  some  packers  may  have  failed  to  state 
the  number  of  cases  shipped  unlabeled.  Unlabeled  goods  later  bore 
the  brokers'  or  jobbers'  label— presumably  the  jobbers'  label  in  most 
instances. 


I  T'^^^^o*^?!^  dealer  as  distinguished  from  the  broker  or  commission  man. 
•nd  ivJte!  wisWni^o^°Sl^^      ^^^^  °°  ^^^^^"^  ^°^'  ^^"^^^  ^^^**'^'  ^""^  ^'^^^  Vegetabl«i. 


CHAPTER  II. 
THE  COirSUMPTION  AND  PRODTJCTIOIT  OF  CANNED  SALMON. 

Section  1.  Consnmption  and  export  of  canned  salmon. 

Canned  salmon  is  a  very  nutritious  food:  it  is  especially  high  in 
protein  and  contains  much  fat.  Various  analyses  show  from 
19.3  to  26.5  per  cent  of  protein,  the  average  apparently  being  about 
20  or  21  per  cent,  and  from  3.6  to  15.3  per  cent  of  fat. 

The  per  capita  consumption  of  canned  salmon  has  increased  in 
recent  years,  being  about  1.2  pounds  in  the  fiscal  year  1900,  1.6 
pounds  in  the  fiscal  year  1910,  1.7  pounds  in  the  fiscal  year  1915,  and 
1.8  pounds  in  the  fiscal  year  1917.  These  fibres  are  arrived  at  by 
taking  the  pack  reported  by  the  Bureau  of  Fisheries  for  the  preceding 
season,  subtracting  the  amount  exported  during  the  fiscal  year,  and 
dividing  by  the  reported  population  of  the  United  States.  This  does 
not  take  into  consideration  the  stocks  carried  over  into  the  next 
season,  but  it  is  evident  that  consumption  has  increased  faster  than 
the  population,  and  that  canned  salmon  has  become  an  important 
foodstuff  in  this  country.  It  was  especially  important  during  the  war, 
as  it  is  a  concentrated,  nonperishable  food,  and  hence  suitable  as  a 
ration  for  armed  forces.  This  is  shown  by  the  large  exports  during 
1916  and  1917.  ,      , 

The  domestic  production  of  salmon  is  greater  than  the  domestic 
consumption  and  a  large  export  trade  has  developed,  the  amount 
exported  increasmg  from  27,082,370  pounds  in  the  fiscal  year  1900 
to  83,446,116  pounds  in  1915,  152,943,962  pounds  in  1916,  and 
117,962,807  pounds  in  1917. 

The  amount  exported  has  increased  faster  than  the  amount 
packed.  The  export  during  a  fiscal  year  is  made  largely  from  the 
pack  of  the  preceding  season  and  seems  to  bear  some  relation  to 
the  quantity  packed,  indicating  that  the  surplus  was  exported  after 
the  domestic  demand  was  met.  Thus,  in  the  fiscal  year  1900,  22.6 
per  cent  of  the  preceding  season's  pack  was  exported.  Similar  per- 
centages are  27.3  for  1905,  30.2  for  1910,  and  31.4  for  1915,  49 
for  1916,  and  38.6  for  1917.  The  high  percentages  for  1916  and  1917 
are  explained  by  the  large  demand  by  the  warring  nations,  and  by 
the  decreased  domestic  consumption  due  to  the  high  price.  British 
Columbia,  Canada,  is  the  only  serious  competitor  of  the  United  States 
in  the  export  trade,  although  Siberia  and  Japan  may  become  rivals  in 
the  future.  The  Siberian  industry  has  grown  rapidly  since  its 
beginning  in  1910;  over  500,000  cases  were  packed  in  1917.  Japan's 
industry  established  in  1913  has  grown  more  slowly.  The  United 
Kingdom  is  the  largest  importer  of  canned  salmon  from  the  United 
States,  taking  62  per  cent  of  our  exports  in  1900, 74  per  cent  in  1915, and 
64  per  cent  in  1917.     The  details  of  exports  are  shown  in  Table  9. 

31 


3'2 


BIPOBT  OM  CANNED  FOODS. 

Tabm  9.-NUMMR  of  POUNDS  OF  CANNED  SALMON  EXPORTED  FROM  tw» 
UNITED  STATES  DURING  FISCAL  YEARS  I^IOIL  ^  ^^* 


ExjKirtodto— 

1900 

1906 

1910 

1915 

1916 

1917 

B'lirope 

18,  Ml,  109 
1.031,818 
1,868,226 

664,126 
3,882,646 

684,466 

21,071,263 
1,666,773 
1,708,828 

3,  W4, 862 
6,257,446 
1,468,383 

44.785.898 
2,224,516 
3.193,812 
1,516,775 

11,568.824 
510,871 

63.760,758 
4.328,246 
1,301.962 
1. 135. 793 

12,100,414 
818,943 

114.163,722 

12,322,259 

4.563.993 

3.336.665 

17,659,036 

808,287 

Hortli  Amerloa 111117' 

82.758,877 

•Sfflutli,  America 

16, 196, 177 

amb : 

3.314,969 

0«»iiil8 

1.326.163 

.AWoa. :::::;: 

12,037,857 
2,328,761 

Tolal 

tur  Mat  of  pwwling  season's 
prtk'ixpOTted. 

27,082,370 
23.6 

35,066,055 
27.3 

63,446,116 
30.2 

83,446,116 
31.4 

152,943.962 
49.0 

117,962,807 

38.6 

-♦f  ^"^^     "^  °^  *il^  preceding  table  shows  that  there  has  been  a 

W„  1,-1°''™T  ""  *•"*  ^^?°^i  "^  <=»'^«'l  ^''^o'l.  "id  that  exports 
have  increased  more  rapidly  than  production.    The  largest  quantity 

f^r.l^'r^'^A^'.l^^.^P''^''''''^  (principally  Australia  £id  tte  Phit 
ipprne  Islands)  takes  the  next  largest  quantity. 

a*ln^^  if  1  onT**'^  ^T^^^3^  chieif  port  for  the  export  of  canned 
salmon.  In  1?00  only  1,477,232  pounds  were  exported  from  Seattle 
as  compared  with  21 ,611 ,030  exported  from  San  Fr^cisco.    However, 

sJaltlet  4  rfSsIfr^'*^''  ^'T  ^t  ^"S^*  ^""^  P^'^^  (principaJiy 
Seattle)  41,064,868  pounds,  which  was  more  than  the  combined 

exports  from  San  Francisco  and  New  York,  the  two  next  most  im- 
portaot  ports. 

Bmtim  2.  Ti©  iftlmon  packs  of  1016  and  1017. 

,  The  total  number  of  full  cases  (forty-eight  1-pound  cans  or  ninety- 
six  f-Dound  cans)  of  salmon  packed  in  1916  was  6,380,925,  and  in 
1917  the  number  was  8,627,453  Figures  for  a  few  small  companies, 
which  could  not  be  located  or  whose  reports  were  unintelligible,  were 
taten  from  the  Pacific  Fisherman  Yearbook,  but  these  amounted  to 
only  35,863  cases  m  1916  and  84,249  ease^  in  1917.  The  other 
figures  were  reported  directly  to  the  Commission  by  the  individual 
companies.  "^ 

Table  10  gives  the  number  of  full  cases  packed  within  the  United 
States  by  species  and  districts  during  1916  and  1917.  The  relative 
imoortance  of  each  species  within  each  district  is  shown  in  Table  11- 
aad  the  relative  importance  of  the  various  districts  in  the  produc' 
tion  of  each  species  is  shown  in  Table  12 


KBPOBT  OK  OAKNED  FOODS. 


33 


TABLE  10.-NUMBER  OF  FULL  CASES  OF  SALMON  CANNED  IN  lOlS  AMD  1917  BY 

GRADES  AND  SECTIONS. 


District. 

Kings. 

Reds. 

Medium 
reds. 

Pinks. 

Chums. 

Steel- 
heads. 

Total. 

1916. 
Western  Alaska 

26,914 
22.045 
18,300 
38,111 
368,021 
76,824 

1,408,325 

582,039 

264,233 

79,004 

6,997 

10.356 

26,004 
55,249 
181,009 
148. 194 
58,916 
67, 136 

42.962 

356,012 

1,290,787 

1,400 

674 

6.693 

146,489 

68,213 

482,961 

424,771 

71,188 

41,879 

1,649,694 

1,063,6SS 

Southeast  Alaska 

Pueet  Sound 

2,237,290 

143^ 
21,««7 
190 

691,623 

Columbia  River 

Outside  Rivers 

526,683 

192,  on 

Total 

650,215 

2,349,954 

526,507 

1,697,628 

1,234,601 

22,2201 

16.380,925 

1917. 
Western  Alaska 

20.041 
19,312 
29,166 
61,139 
394.736 
67,657 

1,671,016 

730.755 

214.457 

410,055 

8.611 

4,745 

5,663 

36,069 

148,493 

123.546 

75.587 

55,815 

3,213 

134,622 

2,149,835 

1,006,989 

722i 

15,528 

51,988 
90,756 
751,540 
344,612 
64,576 
25,467 

1,651,921 

1,011,614 

Soatheast  Alaska 

3,293.491 

1,946,241 

Columbia  River 

Outside  Rivers 

20,494 
348 

554,726 
169,560 

Total 

592,051 

2,939,639 

445, 173 

3,310,909i  !    1,318,839 

20,842 

18,627,453 

1 

I  Includes  3.'>,863  cases  taken  from  Pacific  Fisherman  Yearbook,  1916. 
« Includes  84,249  cases  taken  from  Pacific  Fisherman  Yearbook,  1917. 

Southeast  Alaska  was  the  largest  producer,  with  an  output  of 
2,237,290  cases  in  1916,  and  3,293,491  cases  in  1917.  West  Alaska 
came  second  in  1916,  while  Puget  Sound  came  second  m  1917,  due 
to  the  large  fourth  year  run.  (The  expected  quantity  of  sockeyes 
failed  to  appear,  but  the  very  large  number  of  pmks  made  up  for 
this  failure,  so  far  as  quantity  was  concerned.)  Central  Alaska  was 
the  next  most  important  district,  and  ranked  ahead  of  Puget  Sound 
in  1916.  The  Columbia  Kiver  section  has  had  a  very  consistent 
production.  About  a  haK  miUion  cases  of  salmon  are  packed  on 
the  Columbia  River  each  year,  most  of  which  is  chinook.  Nearly 
67  per  cent  of  the  total  pack  of  this  high-grade  fish  was  packed  on 
the  Columbia  River  in  1916  and  1917.  The  various  smaller  Pacific 
Coast  salmon  streams  have  been  important  in  the  history  of  the 
industry,  but  their  output  makes  up  a  very  small  part  of  the  total 
pack  at  present  (3  per  cent  of  total  m  1916  and  2  per  cent  m  1917). 

Table  U.-RELATIVE  IMPORTANCE  OF  DIFFERENT  SPECIES  WITHIN  EACH  DISTRICT. 

(Per  cent  which  each  species  is  of  total  pack  by  districts.) 


District. 


1916. 

West  Alaska 

Central  Alaska 

Southeast  Alaska 

Puget  Sound 

Columbia  River 

Outside  Rivers 

Percent  of  total 

1917. 

West  Alaska 

Central  Alaska 

Southeast  Alaska 

Puget  Sound 

Columbia  River 

Outside  Rivers 

Per  cent  of  total 


King  or 
Chinook. 


1.6 

2.0 

.8 

5.6 

69.9 

40.0 


8.6 


1.2 

1.9 

.9 

3.1 

71.2 

39.9 


6.9 


Red  or 
sockeye. 


86.4 
53.7 
11.8 
11.4 
1.1 
5.4 


36.8 


96.1 

72.2 

6.6 

21.1 

1.5 

2.8 


34.2 


Medium 
red. 


1.6 

5.1 

8.1 

21.4 

11.2 

29.7 


8.3 


.3 
3.6 
4.5 

6.4 
13.6 
32.9 


5.1 


Pinks  or 
hump- 
back. 


2.6 

32.9 

67.7 

.2 

.1 

3.0 


26.6 


.3 
13.3 
65.3 
51.7 

.1 
9.2 


38.3 


Chum. 


8.8 
6.3 
21.6 
61.4 
13.5 
21.8 


19.4 


3.2 

9.0 

22.8 

17.7 

0.9 

15.0 


15.3 


Steel- 
head. 


.1 

4.2 

.1 


.3 


3.7 
.2 


.2 


Total,  ail 
grades. 


100 
100 
100 
100 
100 
100 


100 


100 
100 
100 
100 
100 
100 


100 


97684—19 3 


M 


BIPOET  ON  CAKWED  FOODS. 


TllW  I2.-RBLATIVI:  IMPORTANCE  OF  DISTRICTS  IN  PRODUCTION  OF  EACH  SPECIES. 
(Pw  oont  of  total  amount  of  each  species  packed  in  various  districts.) 


District. 

Kin^  or 
Chinook. 

Red  or 

sockeye. 

Medium 
red. 

Pinks  or 
hump- 
back. 

Chum . 

teel- 
head. 

Total,  all 
grades. 

—                    1910 

Wirt  Alaska , 

Centmi  Alaska 

SootlMMift  Alaska 

4.9 
4.0 
3.3 
6.9 
66.9 
14.0 

50.9 

24.8 

11.2 

3.4 

.3 

.4 

4.9 
10.5 
34.4 
28.1 
11.2 

lao 

2.5 

21.0 

76.0 

.1 

.1 

.3 



11.8 

5.5 

39.1 

34.4 

5.8 

3.4 

25.9 

17.0 

Puflet  Sound 

Cofemlila  Riirer 

.T 

98.5 
.9 

35.1 

10.8 

Ouliido  Rivera 

8.2 
3.0 

Tlital 

100.0 

100.0 

100.0 

100.0 

100.0 

100.0 

100.0 

1917 

West  Alaska 

Central  Alaska 

SMittiMst  .Alaska 

3.4 

3.3 

4.9 

10.3 

66.7 

11.4 

53.5 

24.9 

7.2 

14.0 

.2 

.2 

1.3 
8.2 

32.8 
28.0 
17.1 
12.6 

.1 

4.1 

64.6 

30.7 

.0 

.5 

4.0 

6.9 

57.0 

26.1 

4.1 

1.9 

19.1 
11.8 

Pugut  Sound.. 

Columbia  River 

Outside  Rivers 

98*4' 

1.6 

38.1 

22.6 

6.4 

2.0 

Total 

100.0 

100.0 

100.0 

100.0 

100.0 

100.0 

100.0 

West  Alaska  is  the  most  important  producer  of  reds,  packing  59.9 
per  cent  of  aH  the  reds  packed  by  American  canners  m  1916,  and 
53.5  per  cent  m  1917.  Heds  made  up  85.4  per  cent  of  the  total 
West  Alaska  pack  m  1916  and  95.1  per  cent  in  1917.  Central  Alaska 
was  the  next  largest  producer  of  reds,  producing  24.9  per  cent  of  all 
the  reds  canned  in  1917  In  1917,  72.2  per  cent  of  the  total  pack  in 
tills  district  consisted  of  reds.  Southeast  Alaska  and  Puget  Sound 
packed  nearly  all  of  the  remainder. 

Southeast  Alaska  and  Puget  Sound  were  the  largest  packers  of 
medium  red  salmon;  these  two  sections  together  packed  60.8  per 
cent  of  all  of  this  grade  of  salmon  in  1917.  This  species,  however. 
IS  relativelj  most  important  in  the  Outside  Eivers,  making  up  32  9 
per  cent  of  the  total  packed  on  these  streams  in  1917  and  nearly  as 
larce  a  percentage  in  1916. 

Southeast  Alaska  was  the  largest  producer  of  pink  or  humpback 
saJmon,  producing  76  per  cent  of  total  in  1916,  and  64.6  per  cent  in 
loJL/^'^^^-^'i'J^  produced  1,946,241  cases  in  1917,  but  only 
§91,623  cases  in  1916.  The  pmk  salmon  seems  to  run  in  these  watera 
in  alternate  years.  Central  Alaska  was  the  only  other  section  impor- 
tant in  the  production  of  this  species. 


CHAPTER  III. 
THE  COST  OF  PACKING  AND  MAEKETIITG  CANirED  SALMOK. 
SectioE  1.  Items  included  in  cost  of  production. 

The  fact  that  there  is  little  uniformity  in  the  accounting  systems 
used  by  salmon  canners  makes  it  difficult  to  compile  uniform  state- 
ments of  the  costs  of  production. 

Cost  statements  were  compiled  by  the  Commission's  accountants 
from  the  books  of  19  companies  having  54  plants  and  packing  52  per 
cent  of  the  total  year's  production  in  1916,  and  from  the  books  of  20 
companies  having  62  plants  and  packing  50.5  per  cent  of  the  total 
yearns  production  in  1917.  It  is  upon  these  statements  gathered  bv 
the  Commission's  accountants  that  tables  13  and  14  are  based. 
Balance  sheets,  profit-and-loss  statements,  and  cost  figures  were  sub- 
mitted to  the  Commission  by  practically  all  the  salmon  canners. 
Some  of  these  were  incomplete  or  in  poor  form.  Most  of  these,  how- 
ever, were  used  in  the  tables  in  sections  2  and  3  of  Chapter  V,  showing 
the  investment  and  profits  in  the  industry  and  in  the  cost  figures  used 
in  tables  15, 16, 17,  and  18,  which  show  the  number  of  cases  of  salmon 
produced  at  various  costs. 

In  compiling  the  costs  the  items  have  been  grouped  under  11 
headings  as  shown  in  table  13.  The  cost  of  raw  fish  includes  the 
amount  paid  for  fish,  the  cost  of  buying,  and  the  cost  of  transporting 
the  fish  from  the  fishing  grounds  to  the  cannery.  When  the  fish  were 
caught  by  the  canning  companies  the  cost  of  raw  fish  includes  wages 
of  fishermen,  cost  of  Doat  operations,  maintenance  and  operation  of 
traps,  cost  of  nets,  seines,  etc.  Salt  is  the  principal  item  mcluded  in 
"cost  of  other  materials." 

The  cost  of  cans  includes  the  amount  paid  when  cans  are  purchased 
and  the  cost  of  materials  and  expenses  of  making  when  the  cans  are 
manufactured.  Many  companies  who  manufacture  their  own  cans, 
however,  kept  poor  records  of  labor  or  overhead  applicable  to  this 
work.  For  this  reason  the  cost  of  cans  in  those  instances  in  which  the 
canners  manufactured  their  own  cans  may  be  inaccurate. 

Under  *'Shooks,  boxes,  and  labels"  are  included  the  costs  of 
labels,  boxes,  and  shooks,  and  nails  when  shooks  were  purchased  and 
nailed  up  at  the  cannery.  In  such  cases  the  cost  of  labor  applicable 
to  the  nailing  of  the  boxes  was  not  ordinarily  kept  separate  from  other 
cannery  operations,  and  so  can  not  be  shown  separately. 

The  item  "labor"  includes  the  amount  paid  for  Chinese  (or 
Japanese)  and  White  cannery  hands.  The  mess  expense,  less  any 
income  from  the  mess,  is  included  in  cost  of  labor. 

The  principal  items  included  in  "Other  conversion  costs"  are 
power,  fuel,  maintenance,  and  repairs. 

"Transportation  of  men  and  supplies"  includes  the  cost  of  trans- 
porting men  to  and  from  the  canneries,  freight  on  supplies  from  the 
bases  of  operations  to  the  canneries,  and  freight  on  canned  salmon 
from  Alaska  canneries  south  to  the  Pacific  coast  ports.    As  many 


M 


» 


flu 


BBPORT  OF  CAWNED  700DS. 


BIPOBT  02Sr  CANNED  FOODS. 


37 


companies  do  not  keep  separate  costs  of  carrying  supplies  north  and 
tausHed  product  south,  the  cost  of  bringing  canned  salmon  south  had 
to  be  mcluded  m  the  cost  of  transportmgsuppUes.  For  the  sake  of 
uniformity  this  was  done  m  all  cases.  When  the  canner  owned  his 
Tessels  and  earned  his  own  supplies  and  men,  the  cost  of  operating 
these  vessels  was  included  in  ''Transportation  of  men  and  supplies  ^ 
Canners  have  no  uniform  method  of  charging  off  depreciation  on 
then-  buildings  and  equipment.  Some  canners  appear  to  make  heavy 
charges  in  good  years  and  small  charges  in  poor  years.  In  some 
instances  the  amount  of  depreciation  was  clearly  excessive  and  had 
to  be  reduced.  On  the  other  hand,  many  companies  failed  to  include 
any  charge  for  depreciation  in  their  costs  of  production  and  m  their 
profit-and-Ioss  statements.  In  such  instances  it  was  necessary  for 
the  Commission  to  add  arbitrary  depreciation  charges 

"Factory  swells"  includes  either  loss  due  to  the  spoihnff  of  the 
canned  product  in  the  packers'  hands  or  refunds  to  buyers  for  goods 
winch  spoiled  before  the  packers'  guaranty  had  expiredf. 

The  itemB  included  m  *^  Plant  overheacf"  are  the  salary  of  factory 
superintendent,  rent  actually  paid  for  buildings,  machmery,  or  other 
equipment,  fire  insurance,  and  taxes  on  property.  Income  and 
excess  profit  taxes  are  not  included  in  cost. 

The  Items  included  in  ''General  expense"  are  salaries  of  officers, 
general  office  expenses  such  as  salaries,  stationery,  postage,  and 
mterest  on  short-term  loans  (under  one  year).  Long-term  loans 
are  considered  as  a  part  of  investment  and  interest  on  such  loans 
IS  not  mcluded  as  a  part  of  operating  cost. 

Income  from  by-products,  such  as  pickled,  smoked,  or  mild-cured 
sahnon,  oil,  fertilizer,  etc.,  is  deducted. 

Contingent  charges  to  cost  on  account  of  commercial  hazard  are 
not  induded  as  apart  of  cost.  No  accurate  basis  for  computing  such 
hazard  is  available.  Verv  few  companies  reported  any  charge  for 
hazard,  and  those  who  did  apparently  guessed  at  the  amoimt.  Many 
canners  have  no  clear  idea  as  to  just  what  risks  it  should  cover.  It 
seems  that  hazard  refers  to  those  unusual  risks  in  an  industry  which 
can  not  be  covered  by  insurance,  such  as  a  poor  run  of  fish,  and  that 
It  should  be  mcluded  m  the  profit-and-loss  account  and  not  included 
m  cost.  Whether  prices  are  to  be  controlled  by  supply  and  demand  or 
annually  based  upon  cost  of  production,  there  wouM  be  no  justifica- 
tion for  the  inclusion  of  hazard  in  cost  in  either  case.  If  supply  and 
demand  operate  freely,  prices  rise  as  a  result  of  short  packs  and  fall 
when  thebacks  are  large  (assuming  that  demand  remains  fairly  con- 
stant). The  setting  aside  of  a  reserve  to  cover  such  fluctuations  in 
earnings  might  facilitate  the  regular  payment  of  dividends,  but  such 
a  reserve  should  be  built  up  out  of  the  profits  in  good  years  and  should 
not  be  included  in  cost,  for  this  would  increase  Qie  cost  of  production 
and  m  poor  years  would  result  ua  unjustifiablv  high  prices  or  m  large 
losses.  If  prices  were  fixed  each  year  on  the  Ibasis  of  the  cost  of  pro- 
duction, these  prices  could  be  assumed  to  be  high  enough  to  cover 
the  hazard  by  allowmg  all  efficient  producers  to  make  a  fair  profit  in 
every  year  for  which  prices  were  fixed. 

Bmtim  %  Cost  of  Production  in  1916  and  1917. 

Table  13  and  table  14  give  the  most  important  items  in  the  cost  of 
production  (exclusive  of  selling  expense). 


CO 


P4 

O 
U 

8 


9 

Q 

iz; 

CQ 

o 
u 


3 

OQ 

u 

« 

o 

OQ 

Q 
S5 


O 

3 
g 

Q 
O 

CeS 

Pi 
o 

OQ 

O 
Q 


1. 

s 

s 


o 


OQ 


M 
to 
cs 


m 
a 

.a 


m 


U 


o 
a* 


I 

o 

E-i 


OQ 


9  O 
W  C8  g  go 


11 


O  9 

i  05  rt  fe 


_  _  cS  R«0 

-   c  h  >;  05 
.3 


ftHS« 


sis 


O  9 

i  OS  «  §<© 


SS  to 

Ph5  § 


9  9 


1  a=2  iH   • 


9  S  oS 

oj3 


^—9 


9  9 

bof  ^    . 

^g|S2 


*-E2  9 


|| 


9 
O 


9 


ese<5o>^»oeoo*e5SS(N^t*io 
■^rododa    '  s>  o  n  .-J « co  tr  *^  rf 

CO-  "OrH       W«„  CO       1-iQ.HN 


«0'^eo«-f^ooo®oOco'-<c6'^tH&co 


CO  .-4 

CO 


e*-* 


t»Q0»Ot>.r3OC< 

rHuScoecQOOoec^f 


)»^asc»t*co 

)  CO  C)  i-i  1-^  <o 


oO'^'Oeooi'^oooot^ooO'-ioioscjr- 
i-i«5o05<-<t^00'-ic>eococ;i~»eo 


IN 


w«o 


Ol  f^ 


enn 


SSJ§! 


3  ■.}•  O  "^ 


.^OC5«OOOt^CO»-<CQ 

^   »  -   —    "-  '-w  OS  t"*,    VM  «^rf 

icNi-iWvwaoeoeo 


COCJCJNOidt-^OiOOO 

;C  m  <XI  i-< 


<CQ 


■  ^o«c«QONc<«tpw5t-!OOC2<5a; 

CO«Od»^t>-OiOrHOCOC»0'-iCO 


C»r^ 


w* 


S' 


oooot— ot— eco>ot>-QOC>>»-ioo 
aJ^r^coaSOT^HOocot^cJNco^ 

NCOtOrH        m  lO  .-I  .I -H  fi  5«  C*  N 


X         „  ■» 


US'*  0( 


;N>nOO-*t^OiOO'*QOO 

>Sooo<»i-icicO'-'iN<«roC 


CO- 


rr  00 

"'IS 

TO 
TO 


co^O?u:)Ptoeogh^gg2g 


O  O  to  t-l  t>-  O  TJ" 


NCO 


OOw' 

toci 

00  «* 


•"J-  cc  o 

.. .    _    CO  O  5P 

CD»H00«t-lOO"^NO03«0 


ooot-«ot-oc>»iooo 
QC««coag?^soN004 


NU3 


|8 


e*eo 


.-I -^  <0  «  If- o  < 

r-«  b- eo  O  00  «5  < 

.k  •    •    *    . 


>00'«»'NO®00(N»-tt- 
ONf-IOC0.-l 

d  CO 


t^oooo)'*oc«iC30C><coO'rio«Oi 

rHeo^c^o>ooo«C'Coco(Ni-Ha>T><i^< 
io»-iOiQ»-ir«w"5»-ioeO'-*ot^< 


wco 


o 

c3 
01  P« 

Q  ® 

*  2 

•#-4  «»-l 

o  o 
o  a>  w 

as^ 

3  S  ea 


.2 


,o 

•d 

a 

CS 

aT 
9 

X 

o 


CQ 

03   O 
C  O 

Oooa 


CQ 
9 

•1—1 

"ft 

3 

CO 

•d 
P3  ol 


a 
9 

B 


en 

9 
> 

c 

O  O 


« 


+J  S  ©  r- 

C5.2  fet 

m  a>  c  -M 


> 

o  »-« 

3  b£ 

(I'd 

ft3 

il 

®  —  '5  -2 

go  ©"S 

a>  S  w 

g^   CO   CO 

®  ®  c  o 
OQOO 


w' 


IIPOKT  OH   CAKKED  FOODS. 


TAIM  I4.-RELATIVE    MPORT.W«  OF  J^VRIOTO  IN   PRODUCTION   OF 

LANNUiD  SALMON:  1916  AND  1917. 


1916 


District. 


West 

AJASkS. 


Cost  of  raw  fish... I  ^^''^% 

Cost  of  other  materials ''\  'r 

Cost  of  cans j  15  g 

Shocks,  boxes,  and  Ial)«ls .*'."'  4.*  1 

Labor. 20  1 

Other  conversion  costs '.'."." ■  1 '  7 

Transport ition. men  and  sunplies.. .'.".". IV.l  is^g 

Depreciation .", i  3,  | 

Faclor>-  swells ' s  " g 

Plant  overhead ^"  .*.'.'.'.".""."*  *  g.*  © 

General  expense .'.'*"''  5.0 

Deduct i ncome  from  by-pi odncts ...'..',:  L 2 

C3st  of  proiuction,  excluding  raw  fish. ....  I  71. 4 

tost  of prodnction... !  im.Q 

Number  of  cases  pwlterl ' 1,411,538 


Central 

Alaska. 


Per  cent. 
23.5 
.1 

lo.o 

4.8 
19.4 

1.5 
14.2 

Wm  if 

.6 

5.4 
.4 

76.5 
100. 0 


South 
Alaska. 


Per  cent. 

*»!■  "if 

.2 

18.5 

5.0 

19.4 

7.1 

4.5 

.2 

6.7 

7.3 

.4 

711.7 
100.0 


777,274       1,002,367 


FuRet 

Average 

Sound. 

u.  s! 

Per  cent. 

Per  cent. 

48.8 

29.5 

.1 

.3 

ILl 

16.5 

2.4 

4.4 

15.6 

19.4 

4.5 

2.1 

1.9 

ILl 

3.9 

3.8 

.1 

.4 

7.6 

7.6 

4.6 

5.6 

.6 

.7 

51.2 

70.5 

100.0 

100.0 

186,789 


3,377,958 


1917 


District. 


Cost  cf  raw  fish 

Cost  of  other  materials ' ' .' 

Cost  of  cms , , 

Shocks,,  boxes, and  labels., '.'.'.'.'.'.['" 

Labor 

Other  ct>n  version  osts [.'".*'.".*."."*'.' 

Transport  tti:>n,  men  and  supplias Zl 

Deiireci'ition . . 

,Fact:>r}-  swells 

Plant  overhead , '.'.'.'."'" 

Gener  i!  e\pens»> '..'.'.'.'".'" 

De  iuct  inome  from  bv-pr  iducts 

Cost  of  pro  lucti:m,  excluding  raw  fish..".'.!* 

Cast  of  production , . . . 

Nam  bar  of  cases  packed » ., , , 


West 
Alaska. 


Per 


Central 
Alaska. 


cerU. 

Per  cent. 

29.5 

27.5 

.3 

.1 

20.4 

21.9 

3.7 

3.9 

17.4 

16.6 

2.4 

1.7 

16.7 

12.7 

3.2 

3.4 

.4 

.3 

7.5 

8.8 

3.5 

5.0 

5.0 

1.9 

70.6 

72.5 

100.0 

100.0 

South 
Alaska. 


1,428,547 


682,314 


Percent. 
30.2 
.1 
23.4 

•     5.5 
15.5 

Jfm  M, 

9.1 

3.2 

.1 

6.0 

6.2 

L4 

69.8 

100.0 


Puget 
Sound. 


Per  cent. 

48.0 

.1 

18.3 

3.5 

13.4 

1.8 

1.5 

2.0 

.2 

5.6 

6.0 

.4 

52.0 

100.0 


Average 

U.S. 


Per  cent. 

32.3 

.3 

21.4 

4.2 

15.9 

2.1 

10.9 

3.0 

.3 

6.7 

5.4 

2.4 

67.7 

100.0 


1,619,480;        60fi,174i      4,33^,515 


1  By  companies  upon  whose  ieport,s  tWs  table  is  based. 

Tlie  largest  items  in  the  cost  of  production  are  raw  fish,  containers 
(MIC  uding  cans,  boxes,  and  labels),  labor,  and  transportation. 

llie^cost  of  raw  feb  is  tbe  largest  single  item  in  cost.     The  average 
cost  of  raw  bsh  for  54  plants,  packing  3,377,958  cases,  in  1916,  wis 
11.07  compared  with  $1.43  for  62  plants  with  an  output  of  4,336  515 
cases  in  1917,  an  increase  of  $0.36,  or  37  per  cent.     This  item  made 
up  29.5  per  cent  of  the  total  cost  of  production  in  1916,  and  32  3 
per  cent  m  1917.    The  cost  of  raw  fish  varied  widely  as  between  dis- 
tricts.    The  average  cost  was  $0,736  per  casein  the  Central  Alaska 
district  m  1916,  while  in  the  Puget  Sound  district  the  cost  was  $2  76 
per  case,  or  275  oer  cent  higher.     In  1917,  the  average  cost  per 
ctee  in  Puget  Sound  was  $2.57,-7.17  per  cent  less  than  in  the  preced- 
es }^ear,  but  more  than  double  the  average  cost  of  $1.13  in  the 
Central  Alaska  district  in  this  year.     The  cost  of  raw  fish  varied 
even  more  widely  as  between  individual  canners.     Wlien  a  canner 
catches  his  own  fish,  the  cost  per  case  varies  with  the  size  of  the 
catch.    The  amounts  paid  as  wages  to  fishermen  and  for  boat  opera- 


BEPOKT  ON"  CANNED  FOODS. 


39 


tions  do  not  increase  or  decrease  in  proportion  to  tbe  size  of  the 
catch.  When  the  fish  are  purchased,  the  cost  is  determined  by  the 
market  price  of  fish  in  that  particular  locality.  In  the  Puget  Sound 
district  costs  were  reported  as  low  as  39  cents  and  as  high  as  $6.23 
per  case  in  1916,  and  as  low  as  25  cents  and  as  high  as  $8.03  in  1917. 
There  is  considerable  waste  in  the  canning  of  salmon.  Based 
on  the  number  of  fish  canned  (partly  estimated)  and  the  average 
weight  of  each  species  reported  by  the  United  States  Bureau  of 
Fisheries,  the  percentage  of  the  weight  of  each  species  wasted  m 
canning  was  as  follows: 


King  or  Chinook... 

Chum 

Red  or  sockeye 

Pink  or  humpback 

Medium  red 

Steelhead 


1916 


1917 


Per  cent. 

Per  cent. 

41.5 

44.9 

34.1 

34.4 

37.5 

32.1 

25.9 

26.3 

13.6 

24.4 

21.3 

22.8 

The  average  cost  of  cans  did  not  vary  greatly  in  the  difiFerent 
districts.  The  average  per  case  was  $0,595  in  1916  and  $0,946  in 
1917.  The  average  cost  in  none  of  the  various  districts  varied  more 
than  8  cents  from  the  average  for  all  districts.  Cans  represented  16.5 
per  cent  of  the  total  cost  of  production  in  1916  and  21.4  per  cent 
in  1917.  They  increased  more  than  any  other  single  item  of  cost, — 
the  1917  cost  was  59  per  cent  more  than  the  cost  in  the  preceding 
year,  while  the  total  cost  of  production  increased  only  22.6  per  cent. 
Can  costs,  however,  varied  widely  as  between  different  canners. 
As  both  1916  and  1917  were  years  of  rising  prices,  companies  carrying 
over  large  quantities  of  cans  had  a  lower  cost  per  case  than  those 
which  bought  their  total  requirements  at  current  prices. 

As  the  preceding  section  makes  clear,  companies  manufacturing 
their  own  cans  often  kept  very  poor  records  of  their  can  costs.  This 
resulted  in  showing  variations  in  can  costs  as  between  canners. 
Prices  of  cans  reported  by  the  packers  varied  widely  for  the  same 
size  of  can.  Prices  reported  for  half-pound  cans  varied  from  $12.12 
to  $15.12  per  thousand  in  1916,  and  from  $17.51  to  $24.14  in  1917. 
The  price  of  1-pound  flat  cans  varied  from  $16.30  to  $16.94  in  1916, 
aJnd  from  $17.74  to  $32.55  in  1917.  The  price  of  1-pound  tail  cans 
varied  from  $13.26  to  $20.70  in  1916,  and  from  $20.06  to  $43.14  in 
1917.  These  differences  are  only  partly  explained  by  the  fact  that 
some  cans  are  lacquered    or  that  different  canners  use  different 

styles  of  cans. 

The  prices  paid  by  different  canners  to  a  can  company  for  the 
same  size  can  also  often  varied  considerably  during  the  same  season. 
The  contracts  for  the  sale  of  these  cans  did  not  show  the  reason  for 
this  price  discrimination.  Canners  who  were  forced  to  buy  cans 
in  the  open  market  were  often  forced  to  pay  prices  much  in  excess 
of  those  paid  by  canners  who  had  long  term  contracts  with  one  of 
the  large  can  companies. 

Labor  made  up  19.4  per  cent  of  the  average  total  cost  of  pro- 
duction in  1916,  and  16.1  per  cent  m  1917.  The  average  cost  of 
cannery  labor  was  $0,701  per  case  in  1916,  and  $0,705  per  case  in 


BBPORT  ON  CAHmSD  FOODS. 

1917,  or  an  increase  of  0.6  per  cent.  The  actual  increase  in  wages 
was  about  15  to  20  per  cent,  but  as  the  1917  pack  was  much  larger 
wan  that  of  1916,  the  cost  per  case  did  not  show  a  similar  increase. 
The  number  of  laborers  employed  at  a  cannery  does  not  vary  in 
proportion  to  the  size  of  the  pack.  If  the  pack  is  small,  the  labor 
cost  per  case  is  h%h,  while  if  the  pack  is  large,  the  number  of  cannery 
hands  is  not  mcreased  proportionately.  This  results  in  a  low  unit 
cost  for  labor.  This  fact  causes  wide  variations  in  labor  costs  per 
case  between  different  plants.  In  1917,  costs  per  case  as  low  as  27 
cents  aJttd  as  high  as  $5.94  were  reported. 

The  item  "Transportation  of  men  and  supplies''  in  1916  makes  up 
over  1 1  per  cent  of  the  average  total  cost  of  production.  The  average 
cost  amounted  to  $0.40  per  case  in  1916,  ancl  $0.48  in  1917,  an  increase 
of  20  per  cent.  It  varied  widely  between  the  different  districts: 
It  was  highest  m  the  West  Alaska  district  and  ordinarily  amounted 
to  very  httle  for  the  plants  located  outside  of  Alaska.  Some  com- 
panies reported  nothing  under  this  heading;  apparently  all  freight 
was  included  under  the  cost  of  raw  materials.  Transportation 
costs  varied  widely  among  different  plants.  Those  plants  which 
were  located  m  out-of-the-way  sections  naturally  had  higher  costs 
than  those  located  at  ports  where  vessels  called  regularly.  In  some 
eases  goods  had  to  be  transshipped  in  smaller  boats  or  contracts 
lad  to  be  made  with  a  steamship  company  to  have  its  boats  call  at 
the  cannery  docks.  Steamship  companies  generally  required  that 
the  canner  agree  to  ship  all  of  his  goods  by  their  vessels  before  they 
would  make  such  contracts.  The  rates  specified  in  the  different 
contracts  vaned  CTeatly.    This  was  especially  true  of  the  rates  on 

gasoline  and  coal.    The  rates  on  the  different  commodities  were 
owever,  generaUy  somewhere  near  the  pubHshed  tariff  rates. 
The  average  cost  of  shooks,  boxes,  and  labels  was  $0,157,  or  4.4 
per  cent  of  the  total  cost  of  production  in  1916,  and  $0,187,  or  4.2 
per  cent  of  the  cost  ol  production  in  1917. 

Plant  overhead  averaged  $0,276  per  case  in  1916,  and  $0,295  in 
I^^LP^'  ^^  increase  of  6.9  per  cent.  General  expense  averaged 
10.204  m  1916,  and  $0,241  in  1917  or  an  increase  of  13.2  per  cent. 
The  expenses  under  these  two  headings  made  up  13.2  per  cent  of  the 
ivarage  total  cost  of  production  in  1916  and  12.1  per  cent  in  1917. 
•n^?  ^*®^  'Depreciation"  averaged  S0.138  per  case  in  1916,  and 
^.134  per  case  m  1917.  In  the  Puget  Sound  district,  the  deprecia- 
tion charge  averaged  $0,222  per  case  m  1916,  while  in  1917  it  averaged 
only  $0,119.  This  decrease  per  case  was  caused  by  the  greatlv 
mcreased  number  of  cases  packed.  &        j- 

The  other  items  included  m  cost  were  small  and  of  little  importance, 
makmg  up  less  than  3  per  cent  of  the  average  total  cost  of  production. 

Stction  3.  Tl«  rouge  in  tie  cost  of  productioa. 

J.  J^®  ^^^^^  number  of  cases  of  all  grades  of  salmon  packed  below 
iifferent  costs  m  1916  and  1917  are  sJhown  in  Table  15. 


REPORT  ON  CANNED  FOODS. 


41 


Tabus  15.— NUMBER  OP  FULL  CABES  OP  SALMON  PACKED  BELOW  DIFFERENT  COSTS: 

1916  AND  1917. 


Cost  per  full  case. 


Under  f  1. 

2. 

2. 

3. 

3. 

4. 

4. 

5. 

6. 

6. 

6. 

7. 

7. 

8. 

8. 

9. 

9. 
10. 
10. 
II. 
11. 
12. 
12. 
13. 
13. 
14. 
14. 
15. 
15. 
10. 
16. 
17. 
17. 
18. 

la 

19 

26. 


50- 
00. 
50. 
00. 
50. 
00. 
50. 
00. 
60. 
00. 
50. 
00. 
50. 
00. 
50. 
00. 
50- 
00. 
60- 
00- 
50- 
00- 
50. 
00. 
60. 
00. 
50. 
00. 
50. 
00. 
50. 
00. 
50. 
00. 
50. 
00. 
50. 


1916 


Number  of 
full  cases. 


64,387 
467,282il 
1,844, 885i 
2,  G59, 164 
3,652,447i 
4, 440, 761 
4, 818, 031 
4,943,604 
5,044,374 
5,071,384 
5,093,675 
5,259,979 
5,308,409 
5, 309, 697  J 
5,314,019i 
5,314,019^ 
5,314,019i 
5,314,019i 
5,338,643i 
5,347,138^ 
5,352,980 
5,360,840 


Percent 
of  total. 


49.6 
68.1 
82.8 
89.9 
92.2 
94.1 


98.1 


100.0 


1917 


Number  of 
full  cases. 


53,965 

53,965 

53,965 

537,431 

1,841,846 
2,975,739 
4,071,554 
4,865,712 
5,407,123 
6,  a32, 996 
6,339,611 
6, 637, 984 
7,021,686 
7,180,273 
7,344,948 
7,359,049 
7,471,172 
7,491,639 
7, 624, 797 
7,640,155 
7, 640, 155 
7,667,325 
7,671,813 
7,678,522 
7,680,157 
7,680,157 
7,680,157 
7,680,157 
7, 680, 157 
7,680,157 
7,702,010 
7,702,010 
7,702,031 
7,702,031 
7, 704, 520 
7,705,913 
7,709,487 


Percent 
of  total. 


52.8 
63.1 
70.1 
78.2 
82.2 
8&1 
91.1 
93.1 
95.3 


96.9 
'98.'9 


100.0 


In  1916  the  lowest  cost  reported  was  $1.85  per  full  case  and  tbe 
highest  was  $12.27.  The  great  bulk  of  the  pack  was  produced  at 
the  lower  costs.  The  greater  part  of  the  salmon  produced  at  costs 
between  $2.00  and  $3.50  per  full  case  was  packed  in  Southeast  and  Cen- 
tral Alaska.  The  bulk  of  the  salmon  produced  at  costs  between  $3.50 
and  $4.50  was  canned  in  West  Alaska;  while  smaller  quantities  at  this 
cost  were  packed  in  the  Central  and  Southeast  Alaska  and  Puget 
Sound  sections.  The  West  and  Southeast  Alaska  packers  were  the 
largest  producers  at  costs  between  $4.50  and  $5.00.  The  Puget  Sound 
and  Central  Alaska  districts  packed  smaller  amounts  at  these  costs, 
which  were  the  maximum  costs  for  any  of  the  Central  .Alaska  plants. 
The  salmon  produced  at  costs  between  $5.00  and  $6.00  was  packed 
principally  by  the  Puget  Sound  plants.  The  Columbia  River  packers 
were  tne  largest  producers  at  costs  between  $6.00  and  $8.00.  All  the 
salmon  packed  at  costs  above  $8.50  was  packed  in  the  Puget  Sound 
plants. 

In  1917  there  was  a  wider  range  in  the  cost  of  production,  the 
lowest  cost  reported  was  $1.33  per  full  case  and  the  highest  cost  was 
$26.21.  The  great  bulk  of  the  production  was  at  costs  between 
$2.50  and  $7.50.  That  part  of  the  pack  which  was  produced  at  costs 
above  $8.50  was  packed  principally  by  Puget  Sound  and  Columbia 
River  canneries,  although  that  part  produced  at  the  very  highest 
costs  was  packed  in  the  West  Alaska  district.    The  bulk  of  the 


IBPOBT  ON  CANWEB  FOODS. 


salmon  canned  at  costs  between  12.50  and  13.50  was  packed  by  the 
boutHeast  and  Central  Alaska  packers.    Most  of  the  production  at 

SnSTZ«^^-'^  ^f  '^-^^^^  ?^^^^^^  ^  SoutLast  Alaska 
altHouffh  lame  amounts  were  packed  at  these  costs  in  West  &nd 

^dTl^T'X  ^Y  ^"'^  ^V^!^^  packers  were  the  most  important 
Broducers  of  the  salmon  packed  at  costs  between  $4.00  and  $5.50. 
bmaller  quantities  were  packed  at  these  costs  by  canners  in  Central 
and  Southeast  Alaska  and  Puget  Sound.  The  Puget  Sound  packers 
produced  the  largest  quantities  at  costs  between  S5.50  and  $8  00 
although  the  quantities  produced  at  these  prices  by  the  Southeast 
Alaska  packers  were  also  considerable. 

Although  costs  vary  considerably  between  the  plants  in  any  one 
om  t?rri  i  W^J^  i'fiTf  exceDtionally  high  or  low  costs  are 
dT^tl  It  ^  clear  that  the  Eulkof^the  pack  in  each  district  is  pro- 
duced at  fau-ly  uniform  costs.  The  different  sections  show  marked 
differences  in  costs  The  costs  at  which  the  bulk  of  the  pack  was 
produced  m  each  of  the  sections  were  as  follows: 


WoatAliiika.. 
OMtmlAliwia..- 
Southrast  Alaska. 


Idle 


Between  I3.o0  and  15.00. . . . 
Between  12.50  and  «4.50, . . . 


oi,taideEi«« :::::::::::!  BetZS«:SS^dj5:oS 

Coimabla  Biver '/Between  11.50  and  $2.50. 

Fiiiwt  ftmitd  " '  ■  llBet ween  15.00  and  18.00 . 

ruget  sound Between  $2.00  and  18.00. 


1917 


Between  $3.50  and  15.50. 
Between  $2.50  and  $5.00. 
Between  $2.50  and  $fi.OO. 
Between  $7.00  and  $9.50. 
Between  $3.00  and  $4.00. 
Between  $7.00  and  $10.00. 
Between  $2.50  and  $8.00. 


*i.??Sf  ^^.t°7  *>1  Central  Alaska  had  the  lowest  costs  and 
that  Sontheast  Alaska  had  the  next  lowest  costs.  West  Alaska  had 
higher  costs,  hut  the  cost  was  more  uniform  between  the  various 
plants.  Puget  Sound  and  Columbia  Kiver  costs  varied  widelv 
betweffli  different  canners.  Southeast  Alaska  costs  were  more  uni- 
Sicte  *  ^***'"  ^^^^  ^^'^^  *^°««  o^  til*  otter  two  Alaska 

.  Comparing  1917  with  1916  costs  of  the  Outside  River  •  cannera 
increased  most,  while  the  costs  of  the  Alaska  canners  increased  the 

leasu. 

Section  4.  Tie  eoit  of  emmlMg  salmon  by  grades. 

The  only  item  of  cost  that  varies  appreciably  in  the  canning  of  the 
different  kinds  of  salmon  is  the  cost  of  raw  fish.  The  costs  of  con- 
tamere,  other  materials,  labor,  and  overhead  are  practicaUy  the  same 
reeardless  of  the  species  canned.  ^ 

When  fish  are  purchased  different  prices  are  paid  for  the  different 
CTades.  The  cost  of  cannmg  each  grade  could,  therefore,  be  obtained 
from  companies  which  purchased  their  fish,  unless  the  canners  failed 
to  keep  records  of  the  amount  of  money  paid  for  the  different  grades. 
Many  cAnnera  however,  claim  that  it  is  impossible  to  ascertam  the 
^oLnfJ^r  <iiff«Fent  grades  when  the  fish  are  caught  by  the  canning 
companies.  This  is  due  to  the  fact  that  the  various  species  arl 
caugM  together  in  the  same  nets  or  traps  and  are  transported  to  the 
camery  by  the  same  crews  and  boats.  It  was  thus  impossible  to  get 
costs  for  the  different  grades  from  many  of  the  companies. 

» Coastal  streams  In  Washinfton,  Oregon,  and  CaUfornia. 


EEPOET  OK  CANNED  FOODS. 


48 


Many  canneries,  however,  are  located  in  sections  where  practically 
all  of  the  fish  caught  are  of  one  species.  When  90  per  cent  or  more 
of  the  output  of  a  plant  consisted  of  one  kind  of  salmon,  the  cost  at 
this  plant  was  considered  as  representing  the  cost  of  canning  this 
grade.  The  cost  of  canning  any  particular  grade,  as  shown  in  this 
report,  therefore,  depends  in  part  upon  the  costs  prevailing  in  the 
section  in  which  the  most  of  this  grade  is  packed.  For  this  reason 
it  may  happen  that  a  grade  bringing  a  low  price  in  the  market 
has  a  higher  cost  of  production  than  a  grade  which  commands 
a  much  higher  price.  The  commercial  prices  of  the  different  grades 
are  based  largely  on  the  demand,  or  on  the  supposed  quahty,  and 
not  upon  any  cost  determination.  Thus,  of  the  salmon  for  which 
costs  by  grades  could  be  obtained  in  1917,  87.8  per  cent  of  the 
''Ked"  was  packed  at  costs  below  $6.50  per  full  case,  while  only 
53.2  per  cent  of  the  "Medium  Red"  and  79.8  per  cent  of  the  "Chum^' 
was  packed  below  this  cost. 

Tables  16  and  17  show  the  number  of  cases  of  each  grade  of  salmon 
packed  at  the  various  costs  in  1916  and  1917,  to  the  extent  to  which 
these  costs  could  be  ascertained. 


-Table  16.-C0ST  OF  CANNINCf   DIFFERENT   GRADES  OF  SALMON- 
CASES.    PACKED  AT  VARIOUS  COSTS  IN  1916. 


-NUMBER  OF  FULL 


Range  in  cost. 


$1.50-$1.99. 
$2.0O-S2.49. 
$2.50-?2.99. 
J3.00-$3.49. 
I3.50-J3.99. 
|4.00-$4.49. 
$4.50-$4.99. 
$5.00-15.49. 
$5.50-f5.99. 
$6.00-96.49. 
$6.5a-$6.99. 
$7.0O-$7.49. 
$7.50-$7.99. 
$8.0O-$8.49. 
$8.50-18.99. 
Over  $9 — 


J:(6ds 


6,591 

95, 171 

l.S8,392 

767,887 

258,382 

91,567 

33,933 


2,347 

5,032 

11,816 


4,322 


Medium 
red. 


9,998 

19,780 

17,343 

22,672 

2,268 

1,215 

3,164 

25,047 


1,726 
10,983 
1,2791 


King  or 
Chinook. 


64,387 


2,932 

874 

1,146 


5,956 
18 


512 

4 

21,615 

6,224 

9 


3,925 


Pink. 


124,248 

332,941 

61,811 

65,117 

6,418 


7,307 


Chum. 


33,690 
109,722 
152,124 
65,141 
48,644 
10,113 


13 


7,559 


Not  clas- 
sified. 


228,368i 

817,057i 

423,734i 

71,320 

472,601 

2G8,4l9k 

88,458' 

75,723 

26,498 

19,927 

130,624 

11,848 


Total. 


42,895i 


64,387 
402,895i 
1,377,603 
814,278i 
993,283^ 
788,313i 
377,270 
125,573 
100,770 

27,010 

22,291 
166,304 

48,430 
1,288J 
4,322 

46,8a0i 


Table  17.-C08T  OF  CANNING  DIFFERENT  GRADES  OF  SALMON-NUMBER  OF  FULL 

CASES  PACKED  AT  VARIOUS  COSTS  IN  1917. 


Range  in  cost. 


$2.00-$2.49... 
$2.50-$2.99... 
$3.00-13.49... 
$3.50-$3.99... 
♦4.0a-$4.49... 
$4.5a-$4.99... 
$5.0(>-$5.49... 
$5.50-$5.99..- 
t6.00-$6.49... 
$6.50-$6.99..- 
$7.0a-$7.49... 
$7.50-$7.99... 
$8.00-$8.49... 
$8.50-$8.99... 
$9.00-$9.49... 
$9.50-$9.99... 
$10.00-$10.49. 
Over  $10.50.. 


Red. 


10,972 
268,265 
367,364 
486,634 
422,943 
202,688 

85,717 
120,802 

20,502 
114,082 

32,104 

27,725 


35,666 


8,445 
33,834 


Medium 
red. 


7,864 

15,205 

4,138 

1,640 

2,819 

11,005 

1,932 

17,589 

10,731 


14,711 


2,655 
7,695 
2,724 


K'ng  or 
Chinook. 


202 

78,893 

1,197 

61 

8,827 

58 

715 

1,923 

395 

21,836 

2,746 

2,485 

11,166 


96 


24,108 


Pink. 


202,138 
471,066 
276,507 

54,489 
104,640 
164,127 
204,712 

81,542 


Chum. 


Not  clas- 
sified. 


8,880 


39,200 


58,379 
110,134 
76,815 
17,637 
34,099 
25,588 

1,418 
22,613 
18,680 
23,930 
35,809 

4,838 


60 


4,507 


53,965 
203,913 
360, 852 
407,872 
517,596 
222,009 
146,131 
322,306 

77,803 
241,207 
204,143 

88,028 

75,716 
2,935 

76,457 

17,716 
117,018 

19,457 


Total. 


53,965 

483,466 

1,304,415 

1,133,893 

1,095,815 

794,158 

541,411 

625,873 

306,615 

298,373 

383,602 

158,687 

164,675 

14,101 

112,123 

20,467 

133,158 

84,690 


mPOBT  OH  OAIOTED  FOODB. 


The  preceding  tables  show  that  in  1917  the  bulk  of  the  red  sahnon 
was  produced  at  costs  of  between  $3.00  and  $5.50  and  the  pink  at  costs 
from  $2.50  to  $4.00.  The  costs  of  chinook  salmon  fell  chiefly  in  the 
two  groups,  $3.00^$3.50  and  $7.00-9.00.  The  largest  quantity  of 
chums  in  any  one  price  group  was  between  $3.00  and  $3.50. 

The  average  costs  of  packmg  the  various  grades  in  1916  and  1917 
are  shown  in  the  foUowing  table  (Table  18) .  This  table  is  based  upon 
the  same  material  as  was  used  in  cotnpiUng  Tables  16  and  17,  but  the 
costs  for  king,  medium  red,  and  chum  are  based  upon  too  small  a 
percentage  of  the  pack  to  be  taken  as  typical  average  costs  for  the 
entire  pack  of  these  grades. 

Tabw  18.-AVEBA0B  COST  OF  CANNING  DIFFERENT  GRADES  OF  SALMON. 


Grade, 


R.«d  or  sockeye. . 
KinsT  or  chinook 

Medium  red 

Pink 

Chum,., 


1916,  per 
foil  case. 


$3,865 
3. 862 
4.323 
2.923 
3.377 


1917,  per 
full  case. 


14.871 
5.829 
6.014 
4.228 

4.701 


Section  5.  Tke  Cost  of  Caaning  in  tlie  Diterent  Sized  Cans. 

The  cost  of  canning  a  |-pound  can  of  salmon  is  much  more  than 
half  as  large  as  that  of  canning  a  1-pound  can;  while  the  costs  of 
raw  fish  and  of  the  other  materials  are  just  one-half  as  much  for  a 
1-pound  can  m  for  a  pound  can,  the  cost  of  the  cans,  labels,  boxes, 
and  labor  for  a  i-pound  can  are  nearly  as  great  as  for  the  1-pound 
can.  The  prices  of  the  American  Can  Co.  show  that  a  4-poimd 
can  costs  the  packer  over  80  per  cent  as  much  as  a  l-pouiid  can. 
Labels  and  boxes  (when  "halves"  are  shipped  four  dozen  to  the 
ca«e),  cost  approximately  as  much  for  a  dozen  i-pound  cans  as  for 
a  dozen  pound  cans.  The  work  of  preparing  the  fish  for  the  can  varies 
with  the  quantity  of  fish  handled.  The  work  of  filling,  closing,  and 
handhng  the  cans  vai-ies  with  the  number  of  cans  packed.  From 
tliese  facts  it  would  appear  that  a  i-pound  can  requires  two-thirds 
or  three-fourths  as  much  labor  as  a  1-pound  can.  However,  when 
cannery  hands  are  paid  a  piece  rate,  this  rate  is  the  same  regardless 

*T  ^^?i*^  ^^"^  "^®^-  ^^'^^  ^^  *^6  packers,  who  submitted  costs  for 
the  different  sized  cans,  reported  the  same  labor  cost  per  dozen 
regardless  of  the  size  of  the  can.  For  these  reasons,  in  compihng 
the  costs  shown  in  Table  19,  the  labor  cost  was  distributed  among 
the  different  sizes  on  the  basis  of  the  number  of  cans  packed. 

Some  of  the  other  expenses  must  be  distributed  over  the  number 
of  cans  irrespective  of  their  size,  while  others  must  be  distributed 
according  to  the  net  weight  of  the  contents. 

Table  19  shows  the  cost  of  packing  the  different  grades  of  salmon 
in  1-pound  tall  and  i-pound  flat  cans  in  1917  and  the  difference 
between  these  costs. 


BBPOBT  ON  CANNED  FOODS. 


45 


TABI.B  19.-THE  COST  OF  CANNING  SALMON  IN  THE  DIFFERENT  SIZED  CANS,    WIT. 


Num- 
ber of 
com- 
pany. 


Location. 


RED  OS  SOCKETE. 


Southeast  Alaska. 
Western  Alaska. . . 
Southeast  Alaska. 


KINO  OR  CHINOOK. 


Western  Alaska... 
Central  Alaska — 
Southeast  Alaska. 


MEDIUM  RED. 


Southeast  Alaska . 
Central  Alaska — 
Southeast  Alaska. 
do... 


Cost  per 

case  No. 

1  tails, 

48  cans. 


PINK. 


Puget  Sound 

Southeast  Alaska. 

do 

do 


Southeast  Alaska. 

do 

do 


CHUH. 


$3,152 
4.572 
3.564 


4.884 
6.460 
8.164 


3.160 

6.868 
7.316 
3.528 


6.232 
3.160 
4.416 
3.548 


3.160 
4.412 
4.040 


Cost  per 

case  No. 

\  flats, 

96  cans. 


$4,440 
6.528 
4.968 


6.592 
8.304 
9.872 


4.440 
8.584 
9.024 
4.952 


7.736 
4.440 
5.808 
4.960 


4.424 
5.544 
5.544 


Differential. 


Per  case. 


$1,288 
1.956 
1.404 


1.708 
1.844 
1.708 


1.280 
1.716 
1.708 
1.424 


L504 
L280 
1.392 
1.412 


1.264 
1.132 
Lfi04 


Percent. 


40.86 
42.78 


34.97 
28.54 
20.92 


40.51 
24.99 
23.50 
40.36 


20.39 
40.51 
3L52 
39.80 


40.00 
25.66 

37.23 


This  table  shows  that  there  is  no  absolutely  fixed  difference  between 
the  cost  of  packing  a  case  of  salmon  in  1-pound  tall  cans  and  in  i- 
pound  flat  cans,  but  that  the  cost  of  "halves"  per  case  is  from  20  to 
40  per  cent  more  than  the  cost  of  the  1-pound  ^' tails/'  and  that  this 
difference  in  cost  is  usually  nearer  the  higher  per  cent.  If  the  cost  of  a 
1-pound  taU  can  of  a  particular  grade  of  salmon  were  $0.10,  the  cost 
of  a  half-pound  can  would  be  about  $0.07. 

As  the  small  can  holds  just  one-half  as  much  meat  as  the  laj^er 
can,  this  shows  a  marked  economy  in  the  use  of  the  larger  cans. 

In  recent  years  the  opening  prices  per  dozen  of  half-pound  cans 
of  salmon  have  generally  been  30  to  35  per  cent  less  than  the  prices 
of  taU  cans  on  the  higher-priced  grades  and  from  20  to  25  per  cent 
less  on  the  cheaper  grades.  This  indicates  that  the  prices  of  the 
poorer  grades  of  salmon  (pink  and  chum)  in  half-pound  cans  have 
been  relatively  too  high,  a  condition  which  may  be  partly  explained 
by  the  smaU  quantity  of  these  grades  packed  in  the  small  cans. 

One-pound  flat  cans  of  salmon  bring  higher  prices  in  the  market 
than  1-pound  tall  cans.  During  the  last  few  years  this  difference  in 
price  has  been  from  10  to  35  cents  per  dozen;  10  and  15  cents  were  the 
most  common  differentials.  The  only  difference  in  the  cost  of  packing 
salmon  in  1-pound  tall  and  1-pound  flat  cans,  so  far  as  the  information 
gathered  in  this  investigation  shows,  is  in  the  difference  in  the  cost  of 
cans.  The  1917  prices  of  the  American  Can  Co.  show  that  the  1- 
pound  flat  cans  cost  from  $0,021  to  $0,027  more  per  dozen  than  the 
1-pound  tall  cans.  It  seems  reasonably  clear  that  the  liigher  prices 
are  not  determined  by  a  higher  cost  of  production,  but  are  explained 
for  the  most  part  by  the  different  quahty  of  meat  packed  in  the  two 
styles  of  cans.  It  is  stated  that  the  best  part  of  the  fish  is  packed  in 
the  flat  cans,  leaving  the  poorer  parts  for  the  tall  cans. 


m 


I 

I 


46 


BIPOBT  OH  CAFOTBD  FOODS. 


^^^'^SJL^.^^^  '''****  ^  ^^^  "^^  ^°'*"  companies  and  large  and  small 

Table  20  gives  the  costs  of  the  large  and  small  plants. 

TAa«  «»~C0MPAEI80H  OF  UNIT  COOTS  OF  PRODUCTION  OF  TYPICAL  PLANTS  ITAVTNr 

LAROE  AND  SMALL  OUTPUTS:  1916  AND  1917  ^^^^*^  ^^^^*NG 


Mgniber  of  plants 

ItOnibor  of  cases  packed  ...*.*.'.**" 

Coit  of  raw  fisli * 

Coit  of  containers .'".'." '• 

Labor  costs... , ;:;::: 

OtJier  ttpenses 

cwt  of  production,  exdudine  »w  fisli: :::::::::: 

Tutal  cost  of  producaoiii  eicfudliig  selling  expense  "  " 


1916 


1917 


plants.i 


Small 
plants.! 


17 

1,818,387 

11.077 

.618 

1414 
3.491 


52 

1,364,303 

SI.  456 

.865 

.750 

L040 

2.655 

4.111 


Lai^e 
plants.i 


40 

4,046,639 

SI. 494 

1.153 

.&I8 

1.007 

2.808 

4.302 


Small 
plants.! 


41 

1,175,874 
S2.024 
1.345. 
.996^ 
1.316 
3.657 
5.681 


>  Lirge  plint.  were  tli««  packing  ow  50,000  cases  and  small  plants  those  packing  under  50,000  cases. 

From  this  table  it  is  seen  that  the  plants  with  large  outout^  in  IQia 

mm  small  outputs,  and  in  1917  at  an  average  of  $1.38  oer  case  less 
than  the  small  output  plants.  The  larger  pfants  packKeir  goods 
15  per  cent  cheaper  than  the  smaller  plants^in  1916,  ^d  24 Ter  c^t 

[mSn?  if''-    ?'•  ^'''^''  P^r  ^^  ^^^  ^  lower  av^rTge  cosfforTl 
iw!  w  r^  '^?T  ^^^^^"?g  "^^^  the  cost  of  production,  but  the  rela! 

tively  lower  labor  cost  is  especially  noteworthy  ■ 

A  comparison  of  the  costs  of  production  of  the  companies  which 

T.WL8  2L~COMPARISON  OF  UNIT  COSTS  OF   PRrtnTrr-rrnxr  oxr  m^r,,v. 

HAVING  LABgHnD  SMliL^OUTFU^TS.m^^^  COMPANIES 


Items. 


1916 


1917 


Ni]tm,ber  of  rompaales 

Mmii,ber  of  plants ".* 

.Number  of  cases  packed 

Cost  of  raw  (ish 

Cost  of  containers "'.'. ' " 

Labor  cost ' 

OtiMiraipanaes,..., llllllll". ' 

Coit  of  production  excluding  raw  fish  * " 
Total  cost  of  production.  .T!! . . . .        *  * ' 


Large 
companies. 


Small     I      Large 
companies,  companies. 


8 
41 

2,691,066 

SI.  as7 

.745 
.703 

list 

2.602 
3.689 


Small 
companies; 


21 

7 

21 

40 

719,274 

3,291,118 

SI. 140 

SI. 312 

.833 

1.107 

.583 

.729 

.8^1 

1.366 

2.370 

3.202 

3.510 

4.514 

30 

31 

1,288,512 

S2.064 

L314 

.707 

.958 

2.979 

5.04a 


This  table  shows  the  average  costs  for  7  of  the  comnanip<^  h^xrn^ar 
^tu^t^^.Z^'^'^AT'^  ''  "^  '^%  complies  havT/trsile! 

aver^gf  cost  o?  ss.siTo/z  :^J'Z^i^''^T^::i:^it':t 


KEPORT  ON  CANNED  FOODSi 


47 


the  smaller  companies  was  $0.18  under  the  average  cost  of  the 
large  companies.  In  1917,  however,  the  large  companies  had  an 
average  cost  of  $4.51,  compared  with  an  average  cost  of  $5.04  by 
the  smaller  companies.  That  is,  the  average  cost  of  the  smaller 
companies  was  $0.53  above  the  average  c6st  of  the  larger  companies. 

The  large-output  companies  had  in  both  years  lower  container 
costs,  probably  due  in  part  to  the  fact  that  they  manufactured  most 
of  their  cans,  (See  sec.  1  of  Chap.  III.)  On  the  other  hand,  the 
large  companies  showed  a  higher  cost  of  labor  and  other  manufactur- 
ing expenses  than  the  small  companies.  This  shows  clearly  that  the 
raw  fish  cost  was  the  determining  factor.  In  1916  the  small-output 
companies  had  a  cost  of  $1.14  for  raw  fish,  which  was  $0.05  above 
the  cost  of  this  item  for  the  large  companies.  In  1917  the  cost  of 
raw  fish  to  the  smaller  companies  ($2.06)  was  $0.75  above  the  cost 
of  this  item  for  the  large  companies.  The  greater  increase  in  the 
cost  of  raw  fish  to  the  smaller  canners  was  due  to  the  fact  that  most 
of  them  purchased  their  fish,  whereas  most  of  the  large  companies 
caught  their  own  fish.  The  market  price  of  fish  increased  between 
1916  and  1917  much  more  than  the  wages  of  the  fishermen.  This 
increase  in  the  cost  of  raw  material  placed  the  small-output  com- 
panies at  a  serious  disadvantage  in  comparison  with  their  large  com- 
petitors in  1917. 

In  both  years  the  small-output  companies  had  a  lower  cost  of  pro- 
duction, excluding  raw  fish  and  containers  than  did  the  large-output 
companies.  It  will  be  interesting,  therefore,  to  observe  how  the  local 
fixing  of  the  prices  of  certain  grades  of  fish  in  1918  will  affect  the  cost 
of  production  of  the  smaller  companies,  which  purchase  their  fish,  as 
compared  to  the  cost  of  production  of  the  large  companies,  which 
catch  their  fish,  and  which  had  to  give  substantial  wage  increases  to 
their  fishmg  crews. 

Section  7.  The  expense  of  marketing  canned  salmon. 

The  cannei's'  methods  of  marketing  canned  salmon  have  been  ex- 
plained fully  in  Chapter  I.  Most  salmon  canners  maintain  no  sales 
departments,  do  little  or  no  advertising,  and  have  few  marketing 
expenses  except  brokerage  or  commission.  (Salmon  is  sold  f.  o.  b. 
Pacific  coast,  and  as  freight  south  from  Alaska  was  included  in  cost 
of  production  no  allowance  for  freight  is  required  in  expense  of 
marketing.)  The  ordinary  brokerage  is  5  per  cent.  If  to  this  amount 
an  allowance  of  1 .5  per  cent  is  made  to  cover  cash  discount,  a  result 
is  obtained  which  is  equivalent  to  a  deduction  of  6.475  per  cent  from 
the  selling  price.  Many  canners  have  no  other  items  which  might  be 
considered  as  marketing  expenses.  A  great  many  companies  con- 
sidered brokerage,  cash  discount,  and  prepaid  freight  as  deductions 
from  sales,  and  reported  no  selling  expenses  whatever. 

The  average  selling  expenses  reported  by  20  companies,  packing 
50  per  cent  of  the  production  in  1917,  was  $0,272  per  case,  or  3.59 
per  cent  of  the  average  net  selling  price.  Some  of  these  companies, 
however,  did  not  analyze  selling  expense  satisfactorily.  For  this  rea- 
son the  selling  expenses  of  8  large  companies,  all  of  which  reported 
the  amount  of  brokerage  paid,  were  analyzed.  The  average  amount 
of  brokerage  paid  by  these  companies  was  4.36  per  cent  of  the  average 
net  selling  price.    The  average  of  the  other  selling  expenses,  such  as 


48 


BBFOBT  OK  CANNED  FOODS. 


the  cost  of  advertising,  the  expense  of  maintaining  sales  departments, 
etc., was  1.029 percent  of  this  figure.  This  made  a  total  selling  ex- 
pense of  $0,382  per  case,  or  5.389  per  cent.  With  the  addition  of  1.5 
per  cent  cash  discount,  not  included  in  selling  expense,  the  total  differ- 
ence, exclusive  of  profit,  between  cost  of  production  and  the  quoted 
Srice  is  6.8  per  cent.  As  many  canners  have  no  expenses  for  selling 
epartments  or  advertising,  this  difference  is  slightly  too  great  for 
the  trade  as  a  whole. 


CHAPTEK  IV. 
THE  PEICE  OF  CANNED  SALMON. 

Section  1.  The  meaning  and  importance  of  ''opening  prices." 

The  custom  has  grown  up  among  the  salmon  canners  of  naming, 
in  the  late  summer  ''opening  prices"  at  which  they  have  decided  to 
sell  their  newly  packed  goods.  These  prices  are  generally  named 
late  in  August,  when  the  canning  season  is  well  advanced,  and  when 
the  size  of  the  pack  is  known  approximately.  The  stocks  carried 
over  from  the  previous  year  (in  Seattle,  New  York,  Liverpool,  and 
in  the  hands  of  canners)  and  the  estimated  demand  are  also  taken  into 
consideration.  Of  recent  years  (since  1905)  there  has  been  great 
uniformity  in  the  opening  prices,  and  nearly  all  canners  in  quoting 
opening  prices  have  followed  the  prices  of  one  or  two  of  the  larger 
companies. 

The  Alaska  Packers'  Association  has  for  several  years  taken  the 
lead  in  making  the  opening  prices  on  all  grades,  except  sockeye,  and 
its  prices  have  been  followed  by  nearly  all  other  canners  in  quoting 
opening  prices.  The  opening  price  on  Puget  Sound  sockeye  salmon 
has  been  made,  during  the  past  few  years,  by  Deming  &  Gould, 
who  are  especially  interested  in  the  Puget  Sound  product,  and  who 
are  regarded  as  best  representing  the  interests  of  the  Puget  Sound 
packers.  The  Alaska  Packers  Association  is  primarily  interested  in 
the  Alsaka  product;  and  as  the  cost  of  production  is  higher  in  the 
Puget  Sound  district,  it  is  said  that  the  packers  there  would  often  like 
to  see  higher  opening  prices  than  those  made  by  the  Alaska  Packers 
Association.  For  this  reason  Deming  &  Gould  opened  prices  on  all 
grades  in  1917.  The  President  of  the  Alaska  Packers  Association 
was  in  favor  of  somewhat  lower  prices  (e.  g.  $2.25,  instead  of  $2.35  on 
Alaska  reds)  but  accepted  those  named  by  the  Puget  Sound  firm 
in  order  not  to  demorahze  the  market. 

All  canners  do  not  follow  these  opening  prices.  Prices  made  by  the 
Puget  Sound  brokers  are  sometimes  slightly  higher  than  those  named 
in  San  Francisco  (for  Alaska  canners).  The  trade  estimates  that 
about  90  per  cent  of  the  total  pack  is  sold  at  the  opening  prices. 

Whether  cooperation  or  agreement  exists  among  leading  packers 
and  brokers  in  fixing  these  opening  prices  has  not  been  determined. 
It  seems  that  the  leading  men  in  the  trade  discuss  market  conditions 
with  each  other  from  time  to  time,  but  it  does  not  appear  that  pre- 
arranged meetings  are  held  for  this  purpose.  It  was  stated  by  the 
president  of  one  of  the  leading  brokerage  firms  that  many  packers 
write  letters,  inquiring  when  the  opening  price  will  be  made,  and 
sometimes  ask  if  an  approximation  of  such  prices  could  be  given  in 
advance.  This  suggests  an  implied  agreement  to  fix  or  maintain 
prices. 


97684—19- 


49 


♦1 

■•    4 


'I 


.1*. 


50 


BIPOBT  Oir  OANmSD  FOODa 


Tliefonomng  table,  taken  from  the  Pacific  Fisherman  for  January. 
W17,  gives  the  openmg  pnces  of  canned  salmon  during  past  21  yeara: 

Tmm  22.-OPENINa  PRICES  ON  CANNED  SALMON  SINCE  1897. 


1807. 


Columbia  River  chlnook. 
PpgBl  Sound  sockeye- . . . 

.Atalaiwd... 

Alaakai^iik 


Cdnmbla  River  efalnook. . 
PwptSomiiliockey« 

Alaska  pink 


Columbia  River  oUnook. 
Pupt  Sound  sockeye. . . . 

AiaBkared. 

Alaska  pink 


Columbia  River  cMnook. 
Ppeul  Sound  sockeye. . . . 

Alaska  red 

Alaska  pink 


Columbia  River  chlnook. 
Pu8«t  Sound  sockeye.. . . 

Alaska  red... 

Alaska  pink 


Columbia  River  diinook.. 

-PugBt  Sound  sockeye 

Alaska  fed 

Alaska  pink 


1808. 


llfvtfi 


1000. 


1001. 


looa. 


1003. 


Columbia  River  chlnook. 
PuffJt  Sound  sockeye.... 
Alaska  red 

Alaska  pink 


1004. 


diambia  River  chlnook. 
Puget  Sound  sockeye....; 
Alaska  red 

pink 


1006. 


Columbia  River  ohjnook.. 

Pjifit  Sound  aockey« 

Alaska  red 

Alaska  pink 


1906. 


Columbia  River  chlnook. 
Pilget  Sound  sookeye . . . . 

Alaska  red 

Alaska  pink 


1007. 


Columbia  River  chlnook.. 
Puget  Sound  sockeye 

Alaska  red. ......,,...,. 

Alaska  pink... 


Tails         Flats 
(per  doz.)  (per  doz.) 


$1.05 
.80 
.90 
.65 


1.05 
.80 

1.00 
.65 


1.25 
1.10 
1.00 
.67} 


1.60 
1.10 
1.10 

•  75 


1.50 
.06 

1.25 
.75 


1.36 
1.00 
.95 
.65 


1.35 

1.50 

L30 

.50 


1.16 

1.66 

1.30 

.70 


1.45 

1.36 

1.00 

.70 


1.50 

1.45 

.95 

.75 


1.65 

1.65 

1.15 

.80 


Halves 
(per  doz.y 


fl.45 
1.60 


S0.85> 
.00 


1.15 
1.66 


00 
.95 


1.65 
1.50 


.90 
4.00 


1.60 
1.60 


1.00 
1.00 


1.75 
1.76 


1.06 
1.10 


KEPORT  ON  CANNED  FOODS. 

Table  22.— OPENING  PRICES  ON  CANNED  SALMON  SINCE  1897-Continued. 


51 


1908. 

Columbia  River  chinook 

Puget  Sound  sockeye '..'.'.'.. 

Puget  Sound  pink 

Puget  Soimd  echo 

Alaska  king 

Alaska  coho 

Alaska  pmk 

Alaska  chum 

Columbia  River  Chinook,  fancy '. 

Puget  Sound  sockeye 

Aiaslca  red... ............................................. 

Alaska  king 

Alaska  coho 

Alaska  pink 


1910. 

Columbia  River  chinook,  fancy 

Puget  Sound  sockeye 

Alaska  red 

Alaska  king 

A  laska  pink 

Alaska  chum 

Medium  red  and  coho 

1911. 

Columbia  River  chinook,  fancy 

Puget  Sound  sockeye 

A 1  aska  red 

Alaska  medium  red 

Alaska  king 

Pink 

Chum 


Talis 
(per  doz.) 


1912. 
ouvK-uyt?.  -••>■>••■■•••••••>••••••«•.<••••. *•.••••■«•••,••*•«•■«••««. ««*«.«,. 

Alaska  red 

Alaska  medium  red 

Alaska  king 

Pink 

Chum 

1913. 

Chinook 

Sockeye 

•  *■  IufSKo  I  Uvl  «■>.  .  ■•••■■••■■•-•••••••••••••••••••••••••■•••••■■•••••■••■a,**** 

Alaska  medium  red 

Alaska  king 

Pink 

Chum 

1914. 

A-iasica  reQ ............................................................. 

Medium  red 

Alaska  kmg 

Pink 

Keta,  or  chum 

1915. 

Chinook 

Sockeye 

Alaska  red 

Medium  red 

Pink 

1  The  San  Frandseo  opening  price  was  S0.65. 


SI.  65 

1.60 

.75 

1.06 

1.15 

1.05 

1.00 

.70 

.70 


1.65 
1.35 
1.15 
1.10 
1.05 
.60 
.67i 


1.75 
1.65 
1.36 
1.35 
.80 
.77i 
1.25 


1.95 
1.95 
1.60 
1.45 
1.80 
1.00 
.95 


1.95 
1.95 
1.40 
1.15 
1.40 
.65 
.62  J 


1.95 

1.50 

1.15 

.85 

1.00 

.65 

.55 


1.95 
1.95 
1.45 
1.15 
1.40 
.90 


1.90 
1.95 
1.50 
1.15 
1.25 
.75 
1.70 


Flats       Halves 
(per  doz.)  (per  doz.) 


$1.75 

1.75 

.80 

1.15 


1.75 
1.50 
1.35 

■i.'26 


1.90 
1.80 
1.50 


1.40 


2.00 
2.00 
1.75 
1.65 
2.00 
1.15 
1.05 


2.00 
2.00 
1.40 
1.25 
1.60 
.65 


2.00 
1.65 
1.35 
1.00 
1.15 
.80 
.70 


2.10 
2.15 
1.80 
1.35 


1.00 
.95 


2.00 
2.15 
1.85 
1.30 

'"."85* 
.80 


$1.05 
1.05 


.76 


1.05 

1.00 

.85 

"."to* 


1.10 
1.10 
1.00 


.80 


1.30 
1.30 
1.12J 
1.00 
1.121 
.80 
.75 


1.25 

1.30 

1.15 

.80 

1.15 

.55 

.50 


1.25 
1.05 
.05 
.70 
.90 
.56 
.50 


1.25 

1.35 

1.10 

.82  J 

1.10 

.70 

.65 


1.25 

1.35 

1.15 

.75 

".*67i 


t 


I 


52 


RBPORT  ON  CANNED  FOODS. 

TAiw  a.-OPENINO  PRICES  ON  CANNED  SALMON  SINCE  1897-Continued. 


1916.  > 


CUiwolc. 


S'OCkeye. 

Alaska  reel . . 
Medium  rod. 
Alaska  king. 

<I    JllJt.K  m    »  m  m.  m.  m  *  * 

ClmiH... 


Tails 

(per  doz.) 


1917. 


Chinook 

Soekeve 

Alaska  red... 
'M-ediiim  red. 
Alaska  king. 

-Jin      O.JlIIi.    m      m     !•*•«(■■ 

Chum 


S1.90 

2.05 
1.50 
1.30 
1.35 
.90 
.85 


2.90 
2.90 
2.35 
2.00 
2.26 
1.65 
1.60 


Flats 
(per  doz.) 


S2.00 
2.25 
1.75 

1.45 


1.10 


3-00 
3.00 
2.60 
2.15 


1.80 
1.75 


Halves 

(per  doz.) 


11.25 

1.40 

1.20 

.90 


.75 
.67J 


1.75 
1.75 
1.65 
1.35 


1.15 


ti'<l?'lS-f?Z'*^*'^'?  jprioes  differed  from  these  In  the  following  particulars:  red  talis.  11.60;  red  halves, 
uiltiawlSSngt^^^^^  ""^"^  "^  flats,  $1.50;  medium*^  red  halves,  II:  pmk  talis.  $1;  chum' 

Note.— All  quotations  are  on  the  basis  of  one  docen  cans. 

SiCtioi  2.  Tie  opening  prices  of  1916  and  1917, 

The  number  of  companies  making  opening  prices,  the  opening 
prices  named,  and  the  time  when  these  prices  were  announced  are 
shown  in  Table  23. 

Table  23.-OPENING  PRICES  IN  1916^  AND  1917,  WITH  PERCENTAGE   OF  COMPANIES 

MAKING  THESE  PRICES. 

1916. 


Grade. 


Red 

Medium  red 

Jl'     >li.iAil..|lh   *■><■■•     M     ••     . 

Chum 

Red 

Medium  red. 

Pink 

Chum 


Number 
of  com- 
panies 
makinR 
(ipening 
price. 


33 
37 

33 
42 


frequent 
price. 


#.1»  «!ltl 

1.30 
.90 


Per  cent 
of  com- 
panies 
making 
this 
price. 


7.5.8 
73.0 
97-0 
81.0 


Second 

most 

frequent 

price. 


$1.60 

1.35 

.95 

.90 


Per  cent 
of  com- 
panies 
making 
this 
price. 


18.2 

16.2 

3.0 

14.3 


Per  cent 
of  com- 
panies 
nammg 
other 
prices. 


6.0 
10.8 


4.7 


1917. 


S2.50 

20.5 

10.3 

2.25 

29.7 

16.2 

1.60 

2.4 

7.1 

1.65 

8.5 

4.3 

Of  the  93  companies  reporting,  33,  or  36.6  per  cent,  named  open- 
mg  prices  on  reds  in  1916,  while  39,  or  39  per  cent  of  the  100  com- 
panies reporting,  named  opening  prices  on  reds  in  1917.  On  the 
other  grades  or  Jdnds  of  salmon,  the  number  of  companies  quoting 
opening  prices  varied  slightly.  These  facts  show  that  most  of  the 
companies  did  not  announce  opening  prices.  This  is  especially  true 
of  the  canners  on  Puget  Sound  and  the  Outside  Rivers.  About 
two-tlurds  of  all  the  Alaska  cannere  announced  opening  prices.  The 
camiers,  who  do  not  announce  openmg  prices,  often  have  contracts 


BBPORT  ON  CANNED  FOODS. 


53 


with  certain  brokers,  who  act  as  their  sales  agents,  and  who  dispose 
of  their  entire  product.  In  such  a  case  the  canner  need  not  go 
through  the  formality  of  announcing  a  set  of  prices,  and  is  generally 
satisfied  if  his  agent  does  not  sell  below  the  opening  prices  fixed  by 
well-known  brokers  or  packers.  Several  companies  reported  that 
they  received  no  record  from  their  agents  as  to  what  the  opening 
prices  were. 

An  examination  of  this  table  (Table  23)  shows  a  very  great  uniform- 
ity in  the  prices  announced  by  the  different  companies,  a  uniformity 
that  has  greater  significance  than  the  number  of  companies  indicates, 
as  the  companies  included  contain  the  largest  producers.  Of  the 
companies  making  opening  prices  on  reds  in  1916,  75.8  per  cent 
named  the  same  price  ($1.50),  while  18.2  per  cent  named  a  higher 
price  ($1.60),  and  6  per  cent  named  lower  prices.  In  1917,  69.2  per 
cent  named  a  uniform  price  on  red  salmon  ($2.35),  while  20.5  per 
cent  named  a  higher  price  ($2.50).  The  other  quotations  showed 
no  uniformity.  The  majority  of  canners  who  made  opening  prices 
in  1916  and  1917,  and  who  did  not  announce  the  common  price, 
named  higher  prices.  The  same  was  true  of  the  prices  on  other 
grades. 

Of  the  companies  who  announced  opening  prices  for  medium  reds 
in  1916,  73  per  cent  made  the  same  price  ($1.30).  In  1917,  54.1 
named  a  uniform  price  for  this  grade  ($2).  In  1916,  16.2  per  cent 
named  a  price  ($1.35) — just  5  cents  above  the  most  common  pricfe; 
in  1917,  29.7  per  cent  named  a  price  ($2.25) — 25  cents  above  the 
most  common  price. 

In  1916,  97  per  cent  of  canners,  who  announced  opening  prices 
on  pinks,  named  a  uniform  price  ($0.90),  and  in  1917,  90.5  per  cent 
named  the  same  price  ($1.65).  In  1916,  81  per  cent  made  a  price 
of  $0.85  for  chums,  and  in  1917,  87.2  per  cent  made  a  price  of  $1.60. 
Thus  the  practice  of  following  a  uniform  opening  price  is  much  more 
pronounced  in  the  case  of  pinks  and  chums  than  in  case  of  reds  and 
medium  reds. 

There  was  a  greater  uniformity  in  opening  prices  in  1916  than  in 
1917.  This  is  probably  explained  by  tne  great  difference  in  the  cost 
of  production  in  1917,  and  by  the  large  demand,  which  enabled  can- 
ners to  obtain  almost  any  price  they  asked. 

The  foregoing  percentages  do  not  prove  that  90  per  cent  of  all 
the  salmon  canning  companies  announced  uniform  prices,  as  the 
figures  do  not  cover  companies  which  announced  no  opening  price. 
However,  the  larger  companies  named  the  same  prices,  and  many 
of  the  smaller  companies  who  did  not  announce  opening  prices  sold 
at  these  prices. 


I| 


ill 


I 


54 


BIPOBT  OF  CANNED  FOODS. 
TlBi.1  ai.--DATK8  WHEN  OPENING  PKICES  WERE  ANNOUNCED. 


1916 


Qrado. 


Week  of 

opening 

price. 


Per  cent 
of  com- 
panies 
whicJi 
named 
price  in 
this 

VWfLjQLiQL  Ap 


Bad... 

Mediiinirwl*. 
Pink.*  ••••«.. 
Cliiini. '.'. 


....do 

Aug.  W-a4 

-...do ... 


69.7 
70.6 
80,7 
73.0 


Per  cent 
of  com- 
panies 
which 
named 

opening 
prices 

between 

Aug.  15 
and 

Sept.  15. 


1917 


87.9 
91.2 
93.5 
94.6 


Week  of 

opening 

prices. 


Aug.  24-31 

—  do   

— do 

....do 


Per  cent 
of  com- 
panies 
which 
named 
price  in 
this 
week. 


73.2 

69.4 
71.4 
66.8 


Per  cent 
of  com- 
panies 
which 
named 

opening 
prices 

between 

Aug.  15 
and 

Sept.  15. 


95.1 
94.4 
95.2 
95.6 


celttom^Zlf^t  ^^^^  ^*"^-  ^^  ***^  *^»t  ^  1916  from  69  per 
iW  nrio«,  fnr  1.?=  ^  ^^  companies  reporting  amiounced  their  open- 

Fmm's^^Qrj™'^*'"'/.^*'^"™^  *>»™ig  the  week  August  16-24. 
AuZ,f  ,f  an/l'  T^u^  *^f  companies  named  their  prices  between 
™nf^f  in^    September  15,  m  1916.    In  1917  from  66  to  73  per 

^^st  T^rXuT'"'^  ^^r  ?Pr^^  P™««  i°  ^^  ^««k  between 
August  24-31 ,  while  95  per  cent  of  the  opening  prices  were  announond 

between  August  15  an/ September  15.^  T^few  prkes  rZ^  Is 

it^.^'t^  T^?u  "/  ^*«"  "^"y  ■^'>*  l'*^^  ^'^^  t™e  opeu^^g  prices 
L^H^^T";^^*'  '^*.*  *^«  Percentage  of  companies  announcilg  open: 
Sin  Tlgit^"^"    ^^^  ^^  """^  September  15  was  greater  Si  fglV 

It  appears  that  the  reason  for  the  uniformity  in  the  date  of  iha 
announcement  is  due  to  the  fact  that  most  canners  and  brokere  wait 
for  one  of  the  two  leading  factors  m  the  trade  to  amiolcrite  prices 

t^?.!,^^"  "^r^  t""^  ^"""^  *«y  *'«  **  O'^ce  Siven  to  the  trade  and 
the  other  packers  then  announce  their  own  prices,  which  are  if  not 

Sr;rtmYnST'a:>uV'^«-  '^''"^^  ^^  *^«  ^-'^'^  ^-^^-  ^- 

Section  3.  Fitire  sales  and  prices. 

fl,f^*^%^"''^  "?  i  ^f^  importance  in  the  canned  salmon  market 
Alfhni  1  w.Lf  ''^  ^'''*  ?''''^'^  vegetables  and  canned  fruits. 
AltHouffh  many  canners  make  so-caUed  future  contracts,  these  are 
generally  made  on  the  "S.  A.  P."  basis  (subject  to  approval  of 
price).  IJiese  S.  A.  P.  contracts  are  really  options  under  which 
the  buyer  can  either  confirm  the  purchase  of  alf  or  of  a  part  of  the 
specified  number  of  cases  when  the  seller  notifies  him  of  his  nrices 
or  can  refuse  to  confirm  the  contract  entirely.    During  the  latter 

C^eliTnlrn^^rtl^^l       t  September,  after  opining  prices 
Mave  been  announced,  the  S.  A.  P.  sales  become  binding  contracts 

J^ntt^tTr'^'^'"  Tt"!r^.  ^^  the  buyers.     It  is  obvbuf  that  such 
wkJktde  ^  overbuying  or  speculative  buying  by 


BBFOBT  OH  OAJSnSTED  FOODS. 


55 


Some  few  packers  sell  under  binding  future  contracts  at  firm  or 
specified  prices.  Such  contracts  are  an  aid  to  the  canners  in  nego- 
tiating loans  from  their  banks,  as  the  sale  and  price  of  his  pack 
are  assured.  When  such  contracts  are  made  before  the  pacldng 
season,  the  canner  assumes  the  risk  of  a  possible  short  pack  and  a 
possible  increase  in  prices,  but  is  protected  against  a  later  decline  in 
prices.  However,  very  few  sucn  contracts  are  made,  and  most 
of  the  salmon  is  sold  on  S.  A.  P.  contracts,  confirmed  when  opening 
prices  are  announced,  or  on  spot  contracts. 

In  case  of  a  short  pack,  pro  rata  deliveries  are  generally  made 
to  buyers  just  as  is  done  by  canners  of  other  commodities  under 
their  future  contracts.^ 

Section  4.  Spot  prices  of  canned  salmon. 

The  spot  prices  of  canned  salmon  on  the  New  York  market  rose 
from  early  in  1916  to  May,  1917,  rising  with  especial  rapidity  dur- 
ing March  and  April,  1917.  After  May,  the  spot  price  fluctuated, 
but  did  not  go  above  the  high  point  reached  in  early  May,  and  on 
the  whole  was  somewhat  lower. 

The  price  of  canned  salmon  rose  at  a  slightly  more  rapid  rate 
than  the  general  average  of  food  prices  during  the  winter  of  1916- 
1917.  In  the  early  summer  of  1917,  the  advances  both  in  the  gen- 
eral average  of  food  prices,  and  in  the  prices  of  canned  salmon  were 
checked  and  shght  declines  followed.  Salmon  prices  declined  some- 
what more  than  the  general  average  of  food  prices,  although  both 
have  been  subject  to  Sequent  fluctuations. 

The  canners  do  not  draw  any  definite  distinction  between  future 
and  spot  sales.  Many  sales  made  or  confirmed  at  the  opening 
prices  are  reported  as  spot  sales.  On  the  other  hand,  many  canners 
reported  only  sales  made  throughout  the  year  at  various  prices  as 
spot  sales.  For  this  reason  it  was  impossible  to  ascertain  satis- 
factorily the  relative  importance  of  spot  and  future  sales  made  by 
the  canners.  It  was  also  impossible  to  compare  canners  spot  prices 
either  with  their  future  prices,  or  with  spot  prices  in  the  eastern  mar- 
kets, or  with  prices  received  by  brokers.  It  seems  that  canners 
should  make  a  clear  distinction  between  spot  and  future  sales,  and 
that  this  distinction  should  be  strictly  ooserved  in  keeping  their 
records. 

Section  5.  Broker's  prices. 

Table  25  shows  the  average  of  the  high  and  low  monthly  prices 
received  by  brokers  on  both  brokerage  and  merchandising  sales  for 
red,  medium  red,  pink,  and  chum  grades  during  1917. 

1  See  Federal  Trade  Conunission  Report  on  Canned  Foods:  Oeneral  Beport,  and  Canned  Vegetables 
and  Fruits,  p.  62,  Washington,  1918. 


41 


i 


^A^^weifhted  average"  allowing  for  different  quantities  of  each  grade  packed,  to  be  sold  at  different 


5€ 


IteOBT  OH  CACHED  FOODS. 


""^£^1^^^^  HIGH  AND   LOW 


MMflH. 


Pacific  coast. 


Ifwdi..... 
April 


UMtt...,,. 


Brokerage 
sales  price 
per  case. 


Merchan- 
dising sales 
price  per 
case. 


Rest  of  United  States. 


Brokerage 

sales  price 

per  case. 


Jttiy 

August 

atptwnber.. 

October 

NoTifmi,lwr.  - 
Btoeiaber... 


ATOnig®forWiii0iitiis 

Erasas  of  merchandising  over  brokerage  prices. 


SS.I8 
5. 2S 
5.32 
6.05 
7.57 
7.30 
7.47 
7.45 
7.78 
7.93 
8.05 
7.98 


6.»5 


15.73 
5.85 

e.3i 

6.43 

7.21 
7.52 
7.46 
7.38 
7.56 
8.08 
a04 
7.19 


15.10 
5.80 
5.96 
7.12 
8.12 
6.84 
7.41 
7.73 
8.09 
8.56 
9.21 
9.05 


Merchant 

dising  sales 

price  per 

case. 


7.06 


7.42 


.11 


15.17 
6.42 
6.72 
7.39 
10.80 
6.40 
6.88 
8.21 
8.04 
8.53 
8.75 
8.84 


r.6« 


.2$ 


throughout  the  cenrrll'rd\im;:;iioToMheVrtr  '^ 
table  shows  that  higher  prices  vereCeTved  by  UC^n  tSr 
buy-and-seU,  or  merr?.andi^ing,  business  than  on  tLirTtrf^Hv  hrnkl 
age  business,  the  difference  bpin<r  oT»«tJr;„  tu  stncUj  broker- 

broker,  than'in  the  cZTtCF!cMcT:,^l,^^^,^^^  ''  *'^  ^"*^™ 

?a?^  ttr kl^t^rr aStsltetin^^^^ 
eoods  which  thev  own  th.^  for  gXds  which  ?hev3ffot^n^^^  P"^!'?" 
fact,  however,  /oes  not  prx)ve  t!mt  tW  pay  Se«  moSl^r  .1^^ 
A  comL^riS  offr  '"^  S""''^  fold  on^^S^eTa^s  "'  ^""'^ 
p.S«  of  tC^,Sitt  toh?t  ^.K  ^"'^^^'^^  sales  l^ade  in  the  two 
K  per  ca^Tnd^n  th^  £  wt  1?!^  '^^  '^^  Pfific  coast  was 
47  cen^ts  being  .just  Tbout  s^i^  Sl^ZV.ZonlttflZl  '' 

WM  i/.u«J  and  $7.68  for  the  eastern  brokprq  nnri  fh;^  a^  "^"Jiers 
62  centeper  case  allowed  a  profit  XrpSthe  Wht  f^l"^  "^ 
|d.le  prpft  ,8,  of  cou«e,  necLary  to  in^u^e  frokers  ^en^ai Tt  W 
kind  of  business,  as  it  involves  some  risk  ^^        *'''* 

in  «if  E^rthiTon  The  &'  The\!^^'^r^f  ^"'''^  "^^  '-- 
were  in  May  November!  3  Dec^mbS^^'^fiTetheU^t-^  P^c^^ 
reached  on  the  Pacific  coast  in  NovemW  lrlr^i,»JS^  P^  °*  ^"* 
seem  to  fluctuate  more  than  brokerage  nri^;«  «nH  ^^^^'°i  P"*'^ 
1917,  eastern  prices  were  more  irfjX  ^th^ pSc'coTs!  irice^^"" 


EEPORT  ON  CANNED  FOODS. 


5T 


Section  6.  Control  of  prices  by  brokers. 

It  will  be  pointed  out  in  a  later  chapter  that  the  salmon  canning 
industry  is  dominated  by  a  few  large  companies  or  groups  of  com- 
panies, each  of  which  is  in  most  cases  connected  with  a  large  broker 
or  other  kind  of  distributer.  It  has  been  shown  that  the  great 
bulk  of  the  product  passes  out  of  the  producers  hands  at  prices 
named  by  a  very  few  of  these  companies. 

This  investigation  has  not  proved  the  existence  of  any  definite  agree- 
ment between  these  companies  in  fixing  these  prices  or  between  the 
various  brokers  and  packers  in  maintaining  them  after  they  have  been 
fixed.  It  is  apparent,  however,  that  the  brokers  occupy  a  very  impor- 
tant place  in  the  marketing  of  salmon .  Some  contracts  between  brokers- 
and  packers  state  that  all  prices  are  to  be  confirmed  by  the  packers. 
Just  how  often  packers  refuse  sales  made  by  brokers  on  account  of 
unsatisfactory  prices  is  not  shown  by  information  at  hand.  Some 
contracts  give  the  broker  the  right  to  fix  the  prices  of  goods  sold  for 
his  principal.  A  copy  of  one  contract  in  the  possession  of  the  Com- 
mission states  that  ''we  [the  brokerage  company]  are  at  all  timea 
to  have  full  authority  to  meet  prices  of  our  competitors."  A  letter 
to.  the  packer  which  accompanied  the  contract  stated  '^we  would  not 

expect  to  seU  without  your  consent  below  prices  made  by for 

the  company  he  operates  and  the  companies  he  represents."  The 
information  at  hand  is  not  sufl^cient  to  show  what  proportion  of  the 
contracts  give  the  brokers  the  right  to  fix  prices.  As  the  broker, 
however,  often  (1)  finances  the  packer,  (2)  sells  his  entire  output, 
and  as  (3)  the  packer  is  often  poorly  informed  as  to  market  condi- 
tions, it  appears  that  the  broker  is  a  very  important  factor  in  making 
prices,  and,  in  fact,  controls  many  of  the  sales,  even  though  the 
contract  may  state  th%.t  all  prices  are  to  be  confirmed  by  the  packer. 


! 


li 


■MHIIIIIIIBa 


Chafteb  V. 

€APITAnZATIOff,    ISYEBTMEMT,    AMD    PIOFITS 

SAIMOV  CAMmVe  IFBFSTBY. 


IV     THE 


Section  1.  Gapitalizatiim.. 

Table  26  showB  the  average  amount  of  capitalization,  borrowed 
funds,  and  outside  investments  of  tlie  American  salmon  canning 
companies.  In  this  table  a  company  having  canneries  in  more  than 
one  district  is  tabulated  in  that  district  in  which  it  packed  the  largest 
liumoer  of  cases. 

TABLt  2S.-CAPITALIZATI0N,  BORROWED   FUNDS,  AND  OUTSIDE   INVESTMENTS  OP 
SALMON   CANNING   COMPANIES    ON   DEC.    31,   1917. 


Numbw  of  oompanies  reporting 

Amotmt  of  stock  outstanding: 

Common,  sTemee  par  value  per  oompanjri... 

Fnteied ,  average  par  ralue  per  company 

Bonds,  par  value  outstanding^  average  per  oom- 

panv 

Average  capitalization  per  company 

Average  amount  of  all  borrowed  fimda  per  company . 
'Outside  InTestments: 

Stook,  par  value,  average  per  company  held .. . . 

BondSi  par  mine,  average  per  company  held.. . 

Louns  and  advances  to  other  companies,  aver- 
age per  company 

Average  total  outside  investments 


Wtftem 


Central 
Alaska. 


11 
$1,319,790.90 


10 

176,200.00 


South 
Alaska. 


1,319,790.90 
1,720,919.37 

585,100.00 
41,159.03 


76,200.00 
90,742.04 


626.86 
626.86 


41 

$144,140.78 

1,951.22 


146,092.00 
55,979.56 

e,  959. 15 
2,341.46 

14,109.98 

23,410.59 


Puget 
Sound. 


32 
$170,811.25 


5,250.00 
176,061.25 
149,427.31 

27,492.50 


1,380.91 
28,873.41 


Number  of  oompanies  reporting , 

Amount  of  stock  outstanding: 

Common,  average  par  value  per  company » 

Pnferred,  average  par  value  per  company 

Bonds,  par  value  outstanding,  average  per  company 

Avenge' capitalization  per  company 

Average  amoimt  of  all  borrowed  funds  per  company 

■Outside  Investments: 

Stock,  par  value,  average  per  company  held 

Bonds,  par  value,  average  per  company  held 

Iioaiis  and  advances  to  other  companies,  average  per  com- 
pany. ......!,, - 

Average  tot^  outside  investments 


Columbia 
River. 


15 

$195,891.60 


Outside 
Rivers. 


19 

$73, 154. 47 
2,105.26 


Total  U.  S. 


195,S91.60 
48,085.57 

450.00 

18,596.66 

19,406.73 
38,453.39 


75,259.73 
28,155.48 

1,155.26 


1,322.78 
2,478.04 


128 

$242,060.47 

937.50 

1,312.50 

244,310.47 

204,450.78 

167,648.32 
53,211.33 

10,921.48 
231,781.13 


1  Includes  capital  of  unincorporated  canners. 

The  largest  companies  had  their  major  operations  in  West  Alaska. 
The  West  Alaska  canners  also  had  the  largest  average  amount  of 
borrowed  funds  per  company,  the  amount  of  such  funds  bemg  in 
excess  of  the  capitaHzation  by  an  average  of  $400,000  per  company. 
The  existence  of  the  larger  companies  m  this  district  is  due  to  the 
fact  that  it  is  farthest  away  from  the  base  of  operations  in  Washing- 
ton, Oregon,  and  California,  and  so  has  a  larger  transportation  cost. 
As  this  district  is  sparsely  settled,  it  has  been  more  difficult  to  develop. 


REPORT  GIST  OANITED  FOODS. 


69 


Salmon  were  so  plentiful,  however,  that  companies  large  enough 
to  meet  the  difficulties  were  attracted  to  this  section.  When  the 
canneries  became  too  plentiful,  consoHdations  leading  to  still  larger 
companies  were  effected  in  various  ways.  These  companies  have  a 
distinct  advantage  over  small  companies  with  a  single  plant  due  to 
their  abiUty  to  absorb  a  loss  at  a  particular  plant  when  the  expected 
run  of  fish  fails.  The  laborers,  materials,  and  supplies  can  be  trans- 
ferred to  another  plant  where  fish  are  more  plentiful.  The  canner 
with  a  single  plant  may  have  very  high  profits  one  year  and  the  next 
year  may  suffer  a  loss. 

The  smallest  companies  are  located  on  the  Outside  Rivers*  and  in 
Central  Alaska.  A  relatively  small  pack  is  obtained  in  the  former 
district,  and  no  large  firm  has  its  major  operations  in  the  latter 
section. 

The  preceding  table  shows  that  practically  no  preferred  stock  or 
bonds  were  issued,  but  that  most  of  the  companies  tad  large  amounts 
of  borrowed  funds.  If  they  had  reported  as  of  July  31,  instead  of 
December  31,  the  figures  would  probably  have  been  much  larger.  In 
December,  when  the  season's  operations  are  over,  and  when  a  large 
part  of  the  goods  have  been  sold  and  paid  for,  most  of  the  loans  for 
purely  operating  expenses  have  been  paid  off.  These  figures  show 
that  the  companies  in  Southeast  Alaska  and  on  the  Outside  Kivers  had 
the  smallest  average  amount  of  borrowed  funds  ($55,979 .56  in  Southeast 
Alaska,  and  $28,155.48  on  the  Outside  Rivers),  in  proportion  to  their 
capitalization.  The  companies  in  Southeast  Alaska,  Outside  Rivers, 
and  Central  Alaska  had  the  lowest  average  amount  of  outside  invest- 
ments ($23,410.57  in  Southeast  Alaska,  $2,478.04  in  Outside  Rivers, 
and  $626.86  in  Central  Alaska). 

Table  26  shows  that  the  average  capitalization  (i.  e.,  stocks  and 
bonds)  for  all  companies  was  $244,310.47.  'The  average  by  sections 
is  as  follows:  West  Alaska,  $1,319,790.90;  Central  Alaska,  $76,200; 
Southeast  Alaska,  $146,092;' Puget  Sound,  $176,061.25;  Columbia 
River,  $195,891.60;  and  Outside  Rivers,  $75,259.73.  These  are  rela- 
tively large  figures  for  canners  and  indicate  that  it  requires  a  good- 
sizea  company  to  operate  efficiently. 

■m 

Section  2. — Investment  in  the  industry. 

The  capitalization  of  a  company  may  vary  widely  from  the  amount 
of  money  invested  therein.  Accordingly  an  effort  has  been  made  to 
approximate  the  true  net  investment  (capital  stock,  bonds,  and 
surplus  with  outside  investments  and  good  wiU  deducted)  in  salmon 
canning  companies,  and  the  results  are  shown  in  Table  27. 

1  Coastal  streams  in  Washington,  Oregon,  and  California. 


f 


t 

III 
■f 


■■■■■Mlilll 


60' 


iPOET  ON  CANNED  FOODS. 


TAiW  27.-WVMTIW  CANNING  COMPANIES..    TOTALS  BY  DISTRICTS 

WITH  AVBRAOB  Pill  CASE  AND  PER  COMPANY  FOR  191ft  AND  1917? 


District. 

Numlwr 
of  com- 
pante. 

Numlter  of 

'Cases 

packed. 

Total 

investment. 

Invest- 
ment 
per  case. 

Averape 

investment 

per  company. 

1916 

West  ,\laska 

Central  Alaska 

Southsajst  Alaska 

9 

fi 

32 
& 
5 

19 

1.970,994 
283,351 

2,010.005 

172.382 

61.978 

919,365 

112,780,507.42 

706,043.48 

6, 6.=i8, 657. 39 

83.5,077.08 

490,3;J9. 10 

5,443.318.70 

16.48 

2.49 
3.31 

4.84 
7.91 
6.92 

11,420,056.38 
117,673.91 

ColmnMa  River 

208, 083. 04 

Ottlside  Rivers- , 

•Pogal  Sound 

167,015.41 

98, 067. 82 

286,516.77 

Total  and  avrarups 

1917 

Wert'AliMka 

Central  Alaska. '.'. * ' 

SottttioMt  Alaska ;;"*' 

Colnmhia  Rivpr 

Oatsiil©  Rivers '. 

Pupt  iSound. 

76 

5,418.075 

26,913,943.17 

4.97 

354,  ISa  83 

10 

8 

88 

5 

5 

24 

2,206,584 
391,441 

3.028.311 

179. 181 

59.729 

1.536,486 

15,605,117.00 
1,405,807.87 
8,194,257.15 
1,181.848.65 
544,756.88 
4,934,235.19 

7.07 
3. 59 
2.71 
6.60 
9.12 
3.21 

— - — ' 

1,560,511.70 
n.-),  725. 98 
215,638.34 
236,369.78 
110,951.37 

205,593.13 

Total  and  averages , . 

m 

7,401,735 

31,.S66,022.74 

4.31 

354.066.91 

The  average  investment  as  shown  by  the  balance  sheets  for  90 
•^i^^'.'l^^c^T^  eompanies  in  1917  was  1356,066.91,  as  compared  with 
1354,130.83  for  76  companies  in  1916.  The  average  investment  per 
case  was  $4  31  m  1917,  as  compared  with  S4.97  in  1916,  the  decrease 
being  due  chiefly  to  the  larger  pack  in  1917. 

In  1917  the  highest  average  investment  per  case  of  output  ($9.12) 
was  in  the  Outside  River  district.*  The  average  investment  per  com- 
pany, however,  was  the  lowest  in  the  same  district.  The  small 
conyanies  located  here  have  a  larger  investment  in  proportion  to 
product  than  the  larger  companies  even  though  they  purciiase  most 
of  then- fish  and  in  some  cases  get  two  packs  a  year.  This  may  be 
due  to  the  distance  of  the  canneries  from  the  supply  of  fish  or  to  the 
inethciency  of  the  small  plants. 

The  next  highest  investment  per  ease  of  output  ($7.07)  was  in  the 
West  Alaska  distnct,  which  also  has  the  largest  average  investment 
ner  company  ($1,560,511.70).  The  reasons  for  this  liave  ah-eady 
been  staled.  The  Columbia  River  packers  also  have  a  relatively 
ni^ investment  per  unit  of  product. 

m  lowest  investment  ner  case  ($2.71)  was  in  the  Southeast  Alaska 
totnct  in  1917,  and  m  the  Central  Alaska  district  ($2.49)  in  1916 
Ihis  w  partly  due  to  low  labor  cost  (see  table  13),  and  also  indicates 
either  the  more  economical  use  of  capital  in  these  sections,  or  posses- 
sion of  the  most  desirable  fishing  grounds. 

It  is  plain  that  the  remote  West  Alaska  packers  and  the  packers  on 
the  coastal  streams,  where  runs  of  fish  are  small  or  irregular,  are  at  a 
disadvantage  in  regard  to  the  amount  of  investment  required  per  unit 
of  product.  The  disadvantage  of  the  West  Alaska  packers  is  very 
largely  overcome  by  the  fact  that  most  of  their  pack  consists  of  reds. 
^^  ^«"J™Lands  a  high  pnce  on  the  market. 

When  the  average  investment  per  company  is  compared  with  the 
average  capitalization,  as  shown  in  table  27,  it  is  seen  that  the  average 
investment  per  company  is  larger  for  each  district,  showing  an  average 

1  Includes  long-term  notes. 


REPORT  ON   CANNED  FOODS. 


61 


undercapitalization.    This  fact  appears  to  indicate  that  earnings 
from  past  years  have  been  left  in  the  business. 

Section  3.— Profits  of  salmon  canning  companies  in  1916  and  1917. 

The  average  net  profit  on  investment  of  76  salmon  canning  com- 
panies in  1916  was  22.1  per  cent  compared  with  52.7  per  cent  for  90 
companies  in  1917.  The  average  profit  per  case  packed  was  $1.10 
in  1916,  compared  with  $2.27  in  1917.  Table  28  snows  the  average 
percentage  of  net  profit  on  investment  and  the  average  net  profit  per 
case  of  product  by  districts  for  1916  and  1917. 

Table  28.— NET   PROFITS  OF  SALMON  CANNING  COMPANIES— PROFIT  PER  CASE   ON 
CASES  PACKED  FOR  1916  AND  1917,  AND  PER  CENT  OF  PROFIT  ON  INVESTMENT. 


District. 

Number 
of  com- 
panies. 

1 

Total 
investment. 

Total  net 
profits. 

Per  cent 
net 

profit  on 
invest- 
ment. 

Number  of 

cases 

packed. 

Net 
profit  per 

case 
packed. 

1916 
West  Alaska 

9 
6 
32 
19 
5 
5 

112,780,507.42 

706,«43.48 

6,658,657.-39 

5,443,318.70 

835,077.08 

490,339.10 

13,077,138.01 

447,150.66 

1,554,216.05 

615,780.55 

189,171.95 

73,513.62 

24.07 
63.33 
23.34 
11.31 
22.65 
14.99 

1,970,994 
283,351 

2,010,005 

919,365 

172,382 

61,978 

SI. 56 

Central  Alaska 

1.58 

Southeast  Alaska 

.77 

Pugct  Sound 

.67 

Colum  bia  R  iver 

1  10 

Outside  Rivers 

1  19 

Total  and  averages. . 

76 

26,913,943.17 

5,956,970.84 

22.13 

5,418.075 

1.10 

1917 
West  Alaska 

10 
8 

38 

24 

5 

5 

15,605,117.00 
1,405,807.87 
8, 194, 257. 15 
4,934,235.19 
1,181,848.6.') 
544,756.88 

7,784,238.91 

670,324.09 

5,888,910.12 

2,006,151.05 

327,942.79 

117,208.58 

49.88 
47.68 
71.87 
40.66 
27.75 
21.52 

2,206,584 

391,441 

3,028,311 

1,536,486 

179, 184 

59,729 

3.53 

Central  Alaska 

1  71 

Southeast  Alaska 

Puget  Sound 

1.94 
1  .^1 

Columbia  River 

I  83 

Outside  Rivers 

1  96 

Total  and  averages. . 

90 

31,866,022.74 

16,794,775.54           52.70 

7,401,735 

2.27 

The  highest  net  profits  on  investment  were  made  by  Central 
Alaska  caimers  in  1916  (63.3  per  cent)  and  by  Southeast  Alaska 
canners  in  1917  (71.9  per  cent).  The  large  pack  in  Southeast  Alaska 
in  1917  reduced  the  labor  costs,  depreciation  charges,  and  general 
expenses  per  case  of  output  and  resulted  in  very  large  net  profits. 
The  lowest  profits  on  investment  made  in  1917  were  those  of  the 
Outside  River  canners,^  who,  however,  averaged  21.5  per  cent.     In 

1916  the  lowest  average  was  11.3  per  cent,  made  by  Puget  Sound 
canners. 

The  average  net  profit  per  case  packed  was  $1.10  in  1916  and 
$2.27  in  1917.  The  lowest  net  profit  per  case  of  product  was  made 
in  both  years  by  the  Puget  Sound  packers  ($0.67  in  1916  and  $1.31 
in  1917).  In  1916  the  highest  avera*];e  net  profit  per  case  of  product 
was  $1.58  as  made  by  the  Central  Alaska  packers,  while  in  1917  the 
highest  was  $3.53,  made  by  the  West  Alaska  packers.  The  packers  of 
Southeast  Alaska  made  the  highest  average  percentage  of  profit  in 

1917  and  the  third  largest  in  1916,  while  the  profits  per  case  of  these 
canners  were  next  to  the  lowest  in  1916  and  only  the  third  highest  in 
1917.  Tlie  relatively  low  profits  per  case  appear  to  be  due  to  the  large 
quantity  of  low-priced  fish  (pinks  and  chums)  canned  in  this  section. 


'  Coastal  streams  in  Washington,  Oregon,  and  California. 


62 


UPOBT  ON  CANNED  I'OODS. 


BBPOBT  ON  CANNED  FOODS. 


63^ 


The  net  profits  made  by  individual  canners  varied  greatly  isk 
both  yeara.  Table  No.  29  shows  the  range  of  profit  or  loss  made- 
by  individual  canners  in  1916  and  1917. 

Tabm  a-PR0FIT8  OR  LOSSES  OF  CANNING  COMPANIES  ON  INVESTMENT. 


.Bauge  of  percent* 
ifes,  profit,  or  loss. 

191>> 

Wflit 
AJasfciL 

C«ati«l. 
Alaska. 

South- 

eest 
Alaska. 

Puget 
Sound. 

Columbia  Outside 
River.      Rivers. 

Total. 

» 

Nnmt^r 
of  cases, 
packed. 

Lobs: 

Over  30 

1 

1 
3 
6 

5 

8 

8 

6 

6 

8 

3 

3 

5 

4 

2 

1 

2 

1 

1 

3 

29.9-25 

•>    ««»*ai**i>i#i« 

3 
2 

1 
6 
3 

1,279 

59,950 

288,010 

97,040 
469.310 
394, 837 
386,224 
1,758,317 
532, 138 

4.9-0 

2 
1 

3 

1 
1 

1 
1 

Proit: 

^O-iJ.... 

S-iJ 

10-14.9 

1 
t 
1 
1 

4 

2 
4 
5 
2 
1 
2 
2 
1 
1 

15-19.9 

2 

20-34.9 

1 

2M9.9 

1 

1 



JO^.9.. 

1 

u-m.9 

1 

1 

137, 352 
210,670 

40-44.9 

1 

•  1 
1 

2 

W-54.9 

1 

184,263 
223,939 
217,012 
137,481 
104,809 

55-59.9... 

ti&-69.9., 

1 

70-74.9 

1 
1 

1 

75-79.9 

80-84.9 

1 
2 



28,220 
100,420 

87,804 

Over  100 



1 

Total 

9 

6 

32 

19 

5 

5 

76 

5,418,075 

Range  of  penent- 
ajSes,  profit,  or  loss. 

1917 

West 
Alaska. 

Central 

Alaska. 

South- 
east 
Alaska. 

Puget 
Sound. 

Columbia 
River. 

Outside 
Rivers. 

Total. 

Number 
of  cases, 
packed. 

horn: 

Over  30... 

1 

1 

2 

3 
2 
1 
2 
4 

7 
2 
3 
3 
3 
2 
7 
4 
4 
7 
4 
5 
4 
5 
1 
1 
4 
1 
11 

40,232 
29.720 

M.9-m 

19.9-15 

1 

9.9-5. 

"* 2" 

1 
1 

1 

8,743 

31,582 

122,330 

188,437 
38.077 

4.9-0 

Profit: 

WJ 

i". 
1  . 

i" 

3 
3 

1 
3 

§-».» 

1(K14.9 

1 
1 
1 
1 
5 

1 

1W9.9 

1 
1 

87,348 

126,923 

83.975 

74,336 

344,680 

ao-M.9 

1 

25-29,9 

1 

3(M4.9. 



1 

1 
1  . 

40-44.9 

i  ' 

1 

1  . 

2  . 

i*. 

2' 

1 

i' . 

1  . 
1  . 

3 

139,388 
229.529- 
1,909.244 
556,626 
724,005 
339.319 
668.767 
87.73? 
149, 193 
691,619 

45-49.9 

4 
2 

3  , 
1 
3 

:::::::::  ::"--i 

S0-W.9 

.55-59.9 

1 

<I0-4I.9.., 

2  . 
1  . 

65-69.9..... . 

• 

W-74,9..., 

CHFHfiri»«F,  •«.•..*.    . 

1    . 
4    . 

r 

•85-89.9 

Over  100 

1    . 
10   . 

"•••■"*•     • 

i" 

56.006 
673,924 

Total 

10                8 

38 

24 

5 

5 

00 

7,401.735 

In  1916  the  largest  loss  reported  was  70.2  per  cent  and  the  largest 

Fi!^T^-  ^u  ^'^  P®^  ^®^*"  ^^1^^*^  ^^®  greatest  loss  was  69  per  cent  and 
the  highest  profit  was  238.7  per  cent.  Between  these  extremes,  the 
profits  of  the  separate  canners  varied  widely. 


In  1916,  10  out  of  76  companies,  or  7.6  per  cent,  reported  losses. 
Of  this  number  5  were  located  on  Puget  Sound  (out  of  a  total  of 
19  reporting  from  that  district) ;  2  were  on  the  coastal  streams  (out 
of  a  total  01  5) ;  and  3  were  in  Southeast  Alaska  (out  of  a  total  of  32). 
Only  4  of  the  10  companies  showed  a  loss  of  over  5  per  cent.  Of  the 
66  companies  making  a  profit,  only  21  made  less  than  15  per  centj. 
31  made  between  15  and  50  per  cent;  11  made  between  50  and  100 
per  cent;  and  3  made  over  100  per  cent  profit. 

In  1917,  12  out  of  90  companies  failed  to  make  any  profit.  Of 
these  companies  6  were  in  tne  Puget  Sound  territory;  5  were  in 
Alaska,  and  only  1  in  the  Outside  River  group.  Of  the  78  companies 
having  a  profit,  only  12  made  under  15  per  cent;  30  made  between 
15  and  50  per  cent;  25  made  between  50  and  100  per  cent,  and  11 
made  over  100  per  cent  profit.  This  analysis  shows  clearly  thaty 
taken  as  a  whole,  the  industry  made  much  larger  profits  in  1917  than 
in  1916. 

This  table  shows  that  most  of  the  companies  with  the  largest 
profits,  in  1917,  were  located  in  Alaska,  and  ruget  Sound;  those  with 
the  very  highest  profits  were  in  Southeast  iflaska.  All  of  the  5 
Columbia  River  companies  made  between  10  and  60  per  cent  in 
both  years. 

The  net  profit  per  case  on  cases  sold,  and  the  percentages  of  net 
profit  on  net  sales,  and  on  cost  of  sales  are  shown  by  mstricts  m 
Table  30. 

Table  30.-SALES  AND  PROFITS  OF  SALMON  CANNING  COMPANIES. 

Average  Pee  Cent  Net  Profit  on  Sales,  and  Cost  of  Sales,  and  Average  Profit  per  Casr 

ON  Number  Cases  Sold  for  1916  and  1917,  by  Districts. 


District. 

Num- 
ber 
of 

com- 
panies. 

Number 

of  eases 

sold. 

Net  sales. 

Cost  Of  sales. 

Net  profit.i 

Per 

ceait 

of  net 

profit 

on 

net 

sales. 

Per 

cent 

of  net 

profit 

oncost 

of 
sales. 

Profit 
per 

case 
on 

cases 

sold. 

1916. 

West  Alaska 

Central  Alaska 

Southeast  Alaska.. 

Puget  Sound 

Columbia  River... 
Outside  Rivers 

9 

6 
26 

•5 

5 

2, 668, 890  J 
255,987' 
1,657,642 
1,218,872 
125,851 
70, 761 J 

$13,954,145.96 

1,206,365.29 

7,031,551.90 

5,940,885.07 

822,317.59 

449,918.18 

$10,914,439.44 

906,413.18 

5,493,889.17 

5,438,376.57 

698,930.21 

380,070.16 

$3,077,138.01 

277;  1.50. 66 

1,273,928.35 

620,2.57.85 

123,387.38 

80,592.06 

22.05 
22.97 
18.12 
10.44 
15.00 
17.91 

28.19 
30.58 
23.19 
11.41 
17.65 
21-20 

$1.15 

1.08 

.77 

.61 

.9S 

1.14 

Total  and 
average... 

66 

5,998,004 

29,405,213.99 

23,832,118.73 

5,452,454.31 

18.54     22.88 

.91 

1917. 

West  Alaska 

Central  Alaska 

Southeast  Alaska. . 

Puget  Soimd 

Columbia  River. . . 
Outside  Rivers 

10 

5 

25 

18 

4 

5 

2,348,033 

257,948 

2,031,927 

1,088,659 

135,242 

61,471 

19,298,450.76 
1,892,410.93 

13,185,457.14 

7,052,899.67 

1,055,124.83 

566,840.84 

11,420,631.88 

1,273,293.80 

8,391,177.74 

5,606,604.74 

914,296.39 

445,708.70 

7,811,995.67 

596,614.98 

4,511,794.15 

1,492,093.95 

140,404.06 

117,208.58 

40.48 
31.57 
34.22 
21.15 
13.31 
20.68 

68.40 
46.86 
53.77 
26.61 
15.36 
26.30 

3.33 
2.31 
2.22 
1.37 
1.04 
2.28 

Total  and 
average. . . 

67 

5,913,280- 

43,051,184.17 

28,051,713.25 

14,670,111.39 

34.08 

52.23 

2.48 

1  The  average  eross  profit  per  case  sold  was  $2.54  in  1917  and  $0.93  in  1916.    Adjustments  due  to  adding 
other  income  and  maBng  other  deductions  account  for  the  difference  between  gross  and  net  profits. 


» 


i 


I 


I 


'A  4 


PORT  03Sr  CANNED  FOODS. 


Tlie^oet  profit  per  case  on  number  of  cases  sold  increased  from 
WM  for  66  companies  in  1916  tx)  12.48  for  67  companies  in  1917. 
rhia  was  a  smaller  profit  per  case  than  was  made  on  the  number  of 
cases  packed  in  1916,  and  larger  than  that  made  on  the  number  of 
cases  packed  m  1917.  This  was  probablv  due  to  the  fact  that  a  part 
of  the  1916  profit  was  applicable  to  goods  produced  in  1915,  as  these 
©onapames  sold  more  cases  than  they  packed  in  1916.  Much  salmon 
packed  in  1917  was  carried  over  into  1918.  Thus,  when  net  profits 
were  divided  by  number  of  cases  sold,  the  unit  profit  was  larger  than 
when  divided  by  the  number  of  cases  packed. 

The  largest  nrofit  per  case  on  cases  sold  was  made  by  West  Alaska 
oanners  in  both  years  ($1.15  in  1916,  and  $3.33  in  1917);  the  second 
largest  profit  in  1916  ($1.14)  was  made  by  the  Outside  River  canners, 
and  in  1917  ($2.31)  was  made  by  the  Central  Alaska  packers.  The 
lowest  profit  per  case  in  1916  ($0.51)  was  realized  by  the  Puget 
bound  packers,  and  the  lowest  profit  per  case  in  1917  ($1.04)  was 
realized  by  the  Columbia  River  canners. 

The  average  net  profit  on  cost  of  sales  in  1916  was  22.9  per  cent, 
yarvinff  from  11.4  per  cent  in  the  Puget  Sound  district  to  30.6  per  cent 
m  the  Central  Alaska  district.  In  1917  the  net  profit  on  cost  of  sales 
was  52.2  per  cent,  being  as  low  as  15.4  per  cent  in  the  Columbia  River 
district,  and  as  high  m  68.4  per  cent  in  the  West  Alaska  district. 
These  percentages  of  net  profit  on  sales  for  the  industry  as  a  whole 
closely  resemble  the  percentages  of  net  profits  made  on  investment, 
mdicating  a  general  turnover  of  capital  at  the  rate  of  once  a  year. 
The  figures  for  some  of  the  districts,  however,  vary  considerably. 
For  instance,  the  percentage  of  profit  on  investment  in  1916  was 
much  higher  than  the  percentage  of  profit  on  cost  of  sales  in  the 
i/entral  Alaska  district,  due  to  low  investment  per  case  of  product. 

The  average  net  profit  on  net  sales  was  18.5  per  cent  in  1916,  and 
34.1  per  cent  m  1917,  varymg  between  the  districts  in  somewhat  the 
same  ratio  as  did  the  percentage  of  net  profits  on  the  cost  of  sales. 

Soutioi  4  Tl©  investment  and  the  profits  of  tlie  brokers. 

The  capital  needed  to  operate  a  brokerage  business  depends  largely 
upon  the  nature  of  the  business.  For  a  strictly  brokerage  business, 
little  capital  is  needed,  as  it  is  only  necessary  to  maintain  an  office 
and  to  pay  salaries  from  one  dehvery  season  to  the  next.  In  such 
cases  the  nrofit  is  really  a  return  for  personal  services  or  selhng 
abihty,  and  its  relation  to  an  investment,  which  is  often  small,  may 
pro ve^  misleading.  A  broker,  however,  who  acts  as  sales  agent  and 
who  finances  several  canners  must  have  a  large  working  capital  or 
must  have  credit  sufficient  to  enable  him  to  help  carry  his  financially 
weak  principals.  If  this  working  capital  is  permanently  invested  in 
the  business,  the  calculation  of  a  percentage  of  net  profits  on  the 
investment  may  be  more  significant. 

Tables  31  and  32  show  the  investment,  the  earnings  from  opera- 
tions, the  total  net  profits,  the  salaries  and  the  return  on  investment  * 
for  1916  and  1917,  for  13  Pacific  Coast  canned  salmon  brokers  and 
8  general  canned-food  brokers,  located  in  other  sections  of  the 
country. 


»  Offiwrs*  salaries  are  Included  with  net  earnings  in  figuring  these  percentages. 


I 


KEPOBT  ON  CANNED  FOODS. 


65. 


Table  31.-INVESTMENTS     AND     EARNINGS     OF     CANNED-FOOD      BROKERS     WHO' 
HANDLED  CONSIDERABLE  QUANTITIES  OF  CANNED  SALMON  DURING  WIB. 


Number  ol  com- 
pany. 


Pacifle  coast  salmon 
brokers: 

1 

2 

3 

4 


6. 

(>- 

7. 

8. 

9. 
10. 
11. 
12. 
13. 


Total 

Average    per 
company... 

General  canned- 
food  brokers  in 
other  sections: 

1 

2 

8 

4 

5 

ft 

7 


Invest- 
ment.! 


«171,399.85 

385,377.34 

7, 305. 81 

48,316.70 

257,3(54.24 

100,000.00 

t»,9(0.31 

2,832.69 

15,297.23 

17, 189. 08 

4:3,370.59 

228,350.82 

124,215.10 


1,461,C85.82 
112,459.00 


79,1 10.  r5 
32,  m\.  79 
4(>,  146.  74 

t8, 139.  eo 

5,  COO.  28 
48,713.34 

9,210.27 
24,354.36 


Gross 
earnings. 


$222, 699. 19 

188,095.09 

43,389.84 

45,352.37 

254,280.32 

(.2,145.11 

28, 194. 78 

9,886.37 

11,(05  85 

30,371.41 

55, 208. 10 

47,962.61 

23, 273. 24 


Net  earn- 
ings from 
operations. 


1,022,464.28 
78,65L09 


Total 313. 977.  a3 

Average    per 
company ...     39, 247. 13 


126,445.54 
48,328.22 
72,8.30.12 
54,400.10 
28, 187. 41 
27, 553. 82 
51,5.W.82 
79,370.02 


$136, 595. 49 

56,930.32 

38,081.58 

9,217.14 

63,396.11 

845. 86 

10,960.31 

2,5(7.43 

■,892.22 

16, 555.  70 

44, 100. 70 

22,351.18 

10,269.46 


415, 769. 60 
31, 982. 28 


Total  net 
profit. 


$136, 595. 49 

5(1,936.32 

38,081.58 

9,217.14 

78,889.25 

2  56,951.31 

10, 9(  0. 31 

2,5(7.--!3 

3,892.22 

16,555.70 

44,(84.00 

(3,538.34 

10,2(i9.46 


415,235.93 
31,94L23 


62,371.74 
26, 376. 80 
46,807.23 
«7,111.77 
15,469.89 
18, 269. 76 
18, 851. 44 
24, 674. 97 


488,669.05     205,650.06 


61,083.63 


25,706.26 


84,565.69 
26,376.80 
46, 807. 23 
«7,1U.77 
15,409.89 
21, 187. 20 
19,693.23 
24,674.97 


Salaries. 


151,335.00 

25,811.56 

1,021.88 

5, 533. 50 

34,449.00 

27,907.25 

11,899.60 

3,  (00. 00 

2, 100. 00 

8,887.50 

7, 424. 55 

23,055.00 

6,942.19 


Net  earn- 
ings plus 
salaries. 


1187,930.49 
82, 747. 88 
39,103.46 
14,750.64 
97,845.11 
28, 753. 21 
22,859.91 
6,U7.43 
5, 992. 22 
25, 443. 20 
51, 525.  25 
45, 400. 18 
17,21Lf5 


209,967.03 
16,15L31 


31,837.57 

16, 108. 03 

5,000.00 

11, 200. 00 


7,559.14 

6, 156. 67 

35, 132. 74 


231,603.24 
&,950.41 


112,994.15 
14, 124. 27 


625,736.63 
48, 132. 80 


94,209.31 
42,484.83 
51,807.23 
4,088.23 
15,409.89 
25,828.90 
2.5,008.11 
59,807.71 


318,644.21 
39,830.53 


»  See  discussion  on  pp.  64, 66-67. 
il7(i84-I9 5- 


'  Loss. 


Per  cent 
01  net 
earnings 
plus  sal- 
aries on 
invest- 
ment.! 


109.6 
21. 4& 

534.41 
30.52 
38.01 
28.75 
37.49 

217.72 
39.17 

148. 01 

118.80 
19.88 
13.85 


42.  so- 


ng. 07 
129.97 
114. 4.3 
5.99 
274.86 

53.02 
271.52 

24.57 


101.48 


f 


I 

■ 


Sit 


66 


BEPOET  ON   CANNED  FOODS. 


T.%BI.«  32.-INVB8TMENTS     AMD     BARN1N08     OF     CANNED-FOOD      BROKERS     WHO 

HANDLED  CONSIDERABLE  QUANTITIES  OP  CANNED  SALMON  DURIN(}  1917. 


MmmbfT  of  ^ma.' 
pmy. 

I!< 

Invest- 
mfint.) 

•287,995.34 

272, 388. 95 

7.  .305.  81 

M.  122.  22 

30ti,253.49 

100.000.00 
«»,9(?0.31 
4.f44.(il 
1«,  189. 45 
21.744.78 
52,f>08.25 

238, 7.80.  If. 

I2(>,718.57 

OroiR 
mmlngs. 

»401,6fi4.78 

2*B,ft8-1.29 

8fi.  .iCHi.  00 

104, 808.  .55 

3(12,401.42 

102.35.5.82 

l(H,n52.f.7 

18. 452. 82 

35,  (123. 59 

24..8.33.r.l 

801 42«^.  03 

45, 7(13. 25 

39,999.49 

Ni»t  wni- 

Ings  from 

operations. 

Total  net 
profit. 

SalariDi. 

Net  earn- 
ings plus 
salaries. 

I*er  cent 
of  net 
enrrlnps 
plus  sal- 
irie.s  on 
Invest- 
ment.' 

Facifle  (*(ia9t  Miraon. 
brokers: 

1 

2 

3. 

4 

Sl(«,  }.V2.  .'■>4 
.W,  H.2. 09 
34,672.97 
41,449.61 
77,293.47 
1.55.09 
72,  .328. 42 
1,88.8.83 
11,189.67 
I0,«vt8. 15 
45,478.05 
19, 289.  m 
15, 163. 87 

SllCi.  452.  rA 
58, 1«'2. 99 
34,  (572. 97 
41,449.61 
79,  .301.  .'W 
8.386.60 
72,  .328  42 
1,.88S  83 
11. 989.  .57 
10,r4.'i.  15 
46, 187.  .84 
36, 105.  90 
15, 163.  87 

IaS.OOO.OO 

34,604.60 

21,788.12 

7, 2.S9.  ,50 

35, 195. 00 

44,242.20 

17. 0.88. 00 

6.000.00 

4.980.00 

9,  (00.  00 

19, 909. 00 

'li,  02:i  00 

7.  'liA.  35 

1221, 452.  iW 
92, 767. 59 
56,461.09 
48,739.11 
112,488.47 
44. 187. 11 
8'^  416.  42 
7,  888.  m 
16,169.57 
20,248.15 
(15;  387. 05 
42.312.  (^^ 
22, 728. 22 

76.89 
34. 05 

772. 82 
90.05 
36. 73 
44.18 

146.67 

169. 84 
99.87 
93.11 

124. 29 
17.72 
17. 93 

5 

li 

7 , 

8 , 

9, , 

10, 

11 

12 

13, 

Total 

ATCTaipe   per 
company... 

1,549,711.94 

119,208.61 

1,(107,812.32 

123,677.88 

550,903.07 
42,381.77 

379, 738.  83 
44,595.29 

289,283.77 
22, 232.  CO 

840,246.84 
64,684.37 

54.21 

General  canned- 
food    brokers    in 
oll»r  iwjtions: 
1 i 

100,622.72 
32.  (m.  79 
49,425.30 
75,2;>1..37 

5,l«MiL28 
4K,713.&I 

9,210.07 
28, 7;J4. 02 

208,  4'<4ri 
78,(i74..'.,3 

110,207.08 
89,762.05 
.•58,343.58 
34, 87.5.  .32 
71,417.44 
94,  ti05. 63 

103,  lU.  85 
45,371.17 
59,304.14 
6,8('5.85 
36,575.56  1 
19, 615. 44 
37, 894. 01 

30,  i«».  m 

132,3r,8.14 
45,371.17 
59,  m.  14 
6,865.85 
36, 57.5.  .56 
21,772.90 
40,016.26 
30, 166.  m 

71.482.82 

27.095.45 

5.000.00 

11,372.74 

9.9('0.00 
42, 405. 84 

174.637.67 
72,4(Mi.62 
m,  Wl.  14 
18,238.59 
36,  .575. 56 
32, 472. 10 
47.854.01 
72,572.52 

173.5.5 
221.70 
130. 10 

24.23 
652.40 

66.45 
519. 58 
2.52.56 

t 1 

r.:::::::::::: 

5... 

?:::;;;;::;;::J 

8, 

Total 

Average   'per 
eom:peiiiy... 

350,249.89 

43,781.24 

746,370.24 
93,296.28 

338,947.70 
42,3(B,46 

372,430.70 
46,563.81 

180, 173. 51 
22,521.69 

519,121.21 
61,890.15 

14^21 

«•  Sm  disfuasion  on  pp.  64, 66-67. 


'  Los.s. 


Includes  only  eight  months. 


These  tables  show  that  tlie  average  investnient  for  the  brokera 
on  the  Pacific  Coast  was  $112,459  in  1916,  and  $119,208.61  for  1917. 
The  largest  investment  in  1917  was  $306,253.49  and  the  smallest 
was  $4,644.61.  *  The  largest  investment  in  1916  was  $385,377.34  and 
the  smallest  was  $2,832.69. 

Some  companies  took  out  most  or  all  of  the  net  profits  as  officers' 
salaries.  In  most  mstances,  to  get  figures  which  correctly  repre- 
sented the  actual  net  profits,  officers'  salaries  had  to  be  added  to 
earnings,  and  for  the  sake  of  uniformity  this  was  done  m  all  cases. 
The  average  percentage  of  net  earnings  (including  salaries)  on  invest- 
ment was  54.21  per  cent  for  the  13  Pacific  Coast  companies  in  1917, 
as  compared  with  42.80  per  cent  for  the  same  companies  in  1916. 
The  highest  percentage  earned  in  1916  was  534  and  the  lowest  was 
10.9.  Of  the  13  companies,  4  made  over  100  per  cent,  3  made 
between  10  and  20  per  cent,  and  the  other  6  macfe  between  20  and 
60  per  cent.  The  highest  percentage  in  1917  was  772.8,  and  the 
lowest  was  17.7.  Four  of  the  companies  made  over  100  per  cent; 
2  made  between  15  Mid  20  per  cent:  3  between  30  and  50  per  cent; 
Mid  4  made  between  50  and  100  per  cent.  It  should  be  noted 
mgiiin  that  investment  in  a  brokerage  business  is  relatively  unim- 


BBPOBT  ON  CANNED  FOODS. 


67 


portant  as  compared  with  a  manufacturing  business,  and  conse- 
quently that  a  large  percentage  of  return  on  investment  is  not 
necessarily  an  excessive  one. 

These  tables  show  that  the  eight  general  canned-food  brokers 
in  the  Eastern  States  had  an  average  investment  of  $43,781.24  in 
1917,  compared  with  $39,247.13  in  1916.  The  largest  investment 
in  1917  was  $100,622.72,  and  the  lowest  was  $5,606.28.  The  average 
relation  of  net  earnings  (including  salaries)  on  investment  was 
101.57  per  cent  in  1916  and  148  per  cent  in  1917.  Five  of  the  eight 
companies  made  over  100  per  cent  in  1916.  Six  of  them  made 
over  100  per  cent,  and  four  of  them  made  Over  200  per  cent  in  1917. 

The  average  net  earnings  (including  salaries)  was  $64,890.15  per 
company  in  1917  and  $39,830.53  in  1916.  The  ordinary  brokerage 
company  has  only  one  or  two  officers,  and  their  salaries  have  been 
added  to  the  earnings.  If  six  per  cent  were  allowed  on  the  invest- 
ment for  interest,  the  remainder  would  amount  to  $62,263.28  per 
company  for  1917  and  $37,475.70  for  1916.  If  this  is  taken  as  a 
reward  for  personal  services,  it  is  evident  that  the  brokerage  business 
paid  handsomely  in  both  years,  especially  as  the  largest  firms  were 
not  included.  The  average  earnings  (including  salaries)  for  the  13 
brokers  on  the  Pacific  Coast  was  $64,634.37  in  1917  and  $48,132.80 
in  1916.  When  6  per  cent  interest  on  investment  is  deducted, 
$57,481.85  per  company  was  left  for  the  owners  and  managers 
in  1917  and  $41,385.26  was  left  in  1916. 

The  eastern  brokers  had  a  smaller  average  investment,  and  made 
a  lower  average  profit  per  company,  but  showed  a  higher  percentage 
of  profit.  Tms  was  apparently  due,  at  least  in  part,  to  the  fact 
that   they  financed  few  canners. 

Section  5.  Brokers*  earnings. 

The  earnings  and  net  profits  made  hy  three  representative  Seattle 
brokers  on  brokerage  and  merchandising  sales  during  1916  and 
1917  are  shown  in  Table  33. 

TABtB  33.— REPRESENTATIVE  SALMON  BROKERS'  EARNINGS  PER  CASE;  AVERAGE 
BROKERAGE  AND  MERCHANDISING  INCOME  AND  PROFITS  PER  CASE  MADE  BY 
TYPICAL  CANNED   SALMON   BROKERS;  1916  AND   1917. 


Com- 
pany. 

Location. 

Year. 

Kind  of  sale. 

Aver- 
age 

broker- 
age 

received 
per 
case. 

Sub- 
broker- 
age. 
paid. 

Net 
broker- 
age. 

Oper- 
ating 
ex- 
pense. 

Net 
profit. 

Aver- 
age 
s^le 

value. 

Per 

cent 

net 

profit 

on 
value. 

I 
1 
1 

1 

Seattle 

Seattle 

Seattle 

Seattle 

Seattle 

Seattle 

Seattle 

Seattle 

Seattle 

1916 
1916 
1917 
1917 
1910 
1917 
1916 
1917 
1917 

Brokerage 

Merchandising.. 

Brokerage 

Merchandising-- 

Brokerage 

Brokerage 

BroVerage 

Brokerage 

Merchandising.. 

to.  223 
.254 
.398 
.123 
.1.52 
.316 
.208 
.296 
.946 

•0. 112 

■■:i87" 

$0.  Ill 
'"."269* 

$0,051 
.051 
.096 
.096 
.057 
.043 
.016 
.111 
.122 

$0,060 
.203 
.113 
.027 
.0401 
.092 
.052 
.019 
.842 

$4.45 
3.77 
6.92 
7.46 
3.88 
6.55 
4.26 
6.42 
7.54 

L3 

5.4 

1.6 

4 

2 
2 
3 
3 
3 

.0,549  '     .0971 
.181     '     . 135 
.140        .068 

.166         .130 

1 

LO 

L4 

1.2 

.3 

11. 1 

1 

The  average  brokerage  per  case  was  19.4  cents  in  1916  and  33.7 
cents  in  1917.  About  one-half  of  this  was  paid  to  sub-brokers,  so 
that  the  net  brokeraore  amounted  to  9.2  cents  in  1916  and  15.8  cents 


ll 

m 


I 


I 


I 


m 


%i} 


66 


BEPORT  ON   CANNED  FOODS. 


Tablk  32.-INVESTMEHT8     AND     EARNINGS     OF     CANNED-FOOD      BROKERS     WHO 
HANDLED  CONSIDERABLE  QUANTITIES  OF  CANNED  SALMON  DURINd  1917. 


Number  of  com- 
pany. 


Facifie  coiwt  salmon 
brokers: 

2- 1 ""-'"''-  - " 

3-.. ,... 

4--. 

5 

II.,. , 

7 

8.. 

§ 

10 

11-.., ,... 

13 


Total ,.-. 

AYerajre    'per 
company . . . 

General  canned- 
food  bro^PTs  in, 
other  .sections: 

1 

,2*''*'-'"'-"'',;^ 

Z^ 

4 

5'."'. , 

fi , . . 

7 , 

8 


Invest- 
ment.* 


$237,995.34 

272,3a<t.W 

7,305.81 

.'>1,122.22 

30«v2.«.49 

100.000.00 

tM.WiO.ai 

4.(H4.6I 

If.,  1S9. 45 

21,744,78 

.52,TO8.25 

2;W,  7S0.  IB 

120,718.57 


1,&WJ11.M 
11!»,2W.61, 


100,622.72 

32,  mi  79 
49,42S.;« 

75,251.37 
.5,  (MM.  28 

48,713.34 

28,7:14.02 


Total ,..-!  350,249.89 

Average    per 
company.,,     43, 781.  M 


Gross 
i>ii,ming8. 


.»W1,6M.78 

208,984.29 

8fi,50«i.00 

104,808.55 

362,401.42 

102.:iVi.82 

101,  (152  67 

18,452.82 

35,tJ23.5l» 

24,8.tJ.(il 

80,426.03 

45,70:i25 

39,999.49 


Npt  earn- 
ings from 
operations. 


$IU%  452  54 
m,  162. 99 
34,672  97 
41,440.61 
77, sax  47 
S55.09 
72,328.42 

1  •  rWj»"l*  Kit 

11,189.57 
10, 648. 15 

45,  478. 05 
19,  289.  60 
15, 163. 87 


1,«)7,S12.32 

123,677.88 


208,484.61 
78,674..^i3 

110, 207.  OS 
89, 762. 05 
,58, 343.  58 
.34,875.:« 
71,417.44 
94,605.63 


746,370.24 
!IS,2»6.28 


550,963.07 

42,381.77 


Total  net 
profit. 


|1(J3, 
58, 
34, 

41, 

79, 

8. 
72. 

i; 

11, 
10, 
46, 
36, 
15, 


452. 54 
1|!2. 99 
672. 97 
449.61 
.301. '4 
386.  tiO 
32K  42 
888  S.3 
989. 57 
(48.  15 
187. 84 
105.  W 
163.87 


Salaries. 


«iiS,000.00 

34, 604.  ♦'O 

21.7.88.12 

7, 2SJ.  .50 

.35, 195. 00 

44,242  20 

17,aS8.00 

6,000.00 

4.980.(1) 

9, 6O0. 00 

19, 909. 00 

2:J,023  00 

7, 5<i4. 3.5 


Net  eam- 
injis  plus 
salaries. 


579,738.83 

44,595.29 


10*1, 154. 8.5 
45,371.17 
59,:«)4. 14 
6. 865.  85 
36, 575.  56 
19,615.44 
37, 894. 01 
30, 106.  m 


132,3.58  14 
45,371.17 
.59,304.14 
6, 8(1.5. 85 
36, 575.  .56 
21,772!K) 
40,016.26 
30,  !<».{» 


338,947.70     372,430.70 
42,368.40      46,553.81 


289, 283. 77 
22,252  60 


71,482  82 
27.095.45 

11.372  74 


12,.8.56.»>»". 

9. 9(X».  00 

42, 405. 84 


180,173.51 

22,521.69 


1221,452.54 
92. 767.  .59 
56,461.09 
48.739.11 
112,488.47 
44,187.11 
8^416.42 
7, 888  83 
16. 169.  .57 
20,  248. 15 
6.5,  .3.S7.  05 
42.312  69 
22,728.22 


840, 246. 84 
64,tm.37 


174.637.67 
72,466.62 
64,304.14 
18. 238. 59 
36.  575.  .5<i 
32;  472. 10 
47.854.01 
72,.572..'>2 


.519,121.21 
64,890.15 


Per  cent 
of  net 
earrlnps 
plus  sal- 
aries on 
invest- 
ment.' 


76. 89 
.34. 05 

772. 82 
90. 05 
36.73 
44.18 

14(v67 

1(^9.  Si 
99.87 
93.11 

124.29 
17.72 
17. 93 


54.21 


173. 5S 

221.70 

130. 10 

24.23 

()52. 40 

«i6. 45 

5 19.  .58 

2.52.56 


148.21 


'*'  See  dimusion  on  pp.  M,  60-67. 


•  JUOfWI* 


looludes  only  eight  months. 


These  tables  show  that  the  average  investment  for  the  brokers 
on  the  Pacific  Coast  was  $112,459  in  1916,  and  $119,208.61  for  1917. 
The  largest  investment  in  1917  was  1306,253.49  and  the  smallest 
was  $4,644.61.  *  The  largest  investment  in  1916  was  $385,377.34  and 
the  smallest  was  $2,832.69. 

Some  companies  took  out  most  or  all  of  the  net  profits  as  officers' 
salaries.  In  most  instances,  to  get  figures  which  correctly  repre- 
sented the  actual  net  profits,  officers'  salaries  had  to  be  added  to 
earnings,  and  for  the  sake  of  imiformity  this  was  done  in  all  cases. 
The  average  percentage  of  net  earnings  (including  salaries)  on  invest- 
ment was  54.21  per  cent  for  the  13  Pacific  Coast  companies  in  1917, 
as  compared  with  42.80  per  cent  for  the  same  companies  in  1916, 
The  liiofhest  percentage  earned  in  1916  was  534  and  the  lowest  was 
10.9.  Of  the  13  companies,  4  made  over  100  per  cent,  3  made 
between  10  and  20  per  cent,  and  the  other  6  made  between  20  and 
50  per  cent.  The  highest  percentage  in  1917  was  772.8,  and  the 
lowest  was  17.7.  Four  of  the  companies  made  over  100  per  cent; 
2  made  between  15  wid  20  per  cent:  3  between  30  and  50  per  cent; 
and  4  made  between  50  and  100  per  cent.  It  should  bo  noted 
again  that  investment  in  a  brokerage  business  is  relatively  unim- 


BBPORT  OK  CAJOTED  FOODS. 


67 


portant  as  compared  with  a  manufacturing  business,  and  conse- 
quently that  a  large  percentage  of  return  on  investmerU  is  not 
necessarily  an  excessive  one. 

These  tables  show  that  the  eight  general  canned-food  brokers 
in  the  Eastern  States  had  an  average  investment  of  $43,781.24  in 
1917,  compared  with  $39,247.13  in  1916.  The  largest  investment 
in  1917  was  $100,622.72,  and  the  lowest  was  $5,606.28.  The  average 
relation  of  net  earnings  (including  salaries)  on  investment  was 
101.57  per  cent  in  1916  and  148  per  cent  in  1917.  Five  of  the  eight 
companies  made  over  100  per  cent  in  1916.  Six  of  them  made 
over  100  per  cent,  and  four  of  them  made  over  200  per  cent  in  1917. 

The  average  net  earnings  (including  salaries)  was  $64,890.15  per 
company  in  1917  and  $39,830.53  in  1916.  The  ordinary  brokerage 
company  has  only  one  or  two  officers,  and  their  salaries  have  been 
added  to  the  earnings.  If  six  per  cent  were  allowed  on  the  invest- 
ment for  interest,  the  remainder  would  amount  to  $62,263.28  per 
company  for  1917  and  $37,475.70  for  1916.  If  this  is  taken  as  a 
reward  for  personal  services,  it  is  evident  that  the  brokerage  business 
paid  handsomely  in  both  years,  especially  as  the  largest  firms  were 
not  included.  The  average  earnings  (including  salaries)  for  the  13 
brokers  on  the  Pacific  Coast  was  $64,634.37  in  1917  and  $48,132.80 
in  1916.  When  6  per  cent  interest  on  investment  is  deducted, 
$57,481.85  per  company  was  left  for  the  owners  and  managers 
in  1917  and  $41,385.26  was  left  in  1916. 

The  eastern  brokers  had  a  smaller  average  investment,  and  made 
a  lower  average  profit  per  company,  but  showed  a  higher  percentage 
of  profit.  This  was  apparently  due,  at  least  in  part,  to  the  fact 
that   they  financed  few   canners. 

Section  5.  Brokers'  earnings. 

The  earnings  and  net  profits  made  by  three  representative  Seattle 
brokers  on  brokerage  and  merchandising  sales  during  1916  and 
1917  are  shown  in  Table  33. 

Tablk  33.— REPRESENTATIVE  SALMON  BROKERS'  EARNINGS  PER  CASE;  AVERAGE 
BROKERAGE  AND  MERCHANDISING  INCOME  AND  PROFITS  PER  CASE  MADE  BY 
TYPICAL  CANNED   SALMON   BROKERS;  1916  AND   1917. 


Com- 
pany. 


Location. 

Year. 

Seattle 

1916 

Seattle 

1916 

Seattle 

1917 

Seattle 

1917 

Seattle 

1916 

Seattle 

1917 

Seattle 

1916 

Seattle 

1917 

Seattle 

1917 

Kind  of  sale. 


Aver- 
age 

broker- 
age 

received 
per 
case. 


Brokerage 1  SO.  223 

Merchandising . .  I      .  254 

Brokerage !      .398 

Merchandising . .  i      .123 

Brokerage .152 

Brokerage 316 

BroVertige 208 

Brokerage '      .296 

Merchandising . . !      .  946 


Sub- 

Net 

Oper- 

broker- 

broker- 

ating 

Net 

age. 

age. 

ex- 

profit. 

paid. 

pense. 

$0. 112 

$0.  Ill 

$0,051 

fO.060 

.051 
.096 

.203 
.113 

.i87 

.209 

.096 
.057 

.027 
.0401 

.0.549 

.0971 

.181 

.135 

.043 

.092 

.140 

.068 

.016 

.052 

.  166 

.1.30 

.111 

.oig 

.122 

.842 

Aver- 
age 
sMe 

value. 


$4.45 
3.77 
6.92 
7.46 
3.88 
6.55 
4.26 
6.42 
7.54 


Per 

cent 

net 

profit 

on 
value. 


L3 
5.4 
1.6 

.4 
LO 
1.4 
1.2 

.3 
11.1 


The  average  brokerage  per  case  was  19.4  cents  in  1916  and  33.7 
cents  in  1917.  About  one-half  of  this  was  paid  to  sub-brokers,  so 
that  the  net  brokerage  amounted  to  9.2  cents  in  1916  and  15.8  cents 


I*  \ 


f  ' 

IP' 


68 


IIPOET  ON  CANNED  FOODS. 


in  1917,  an  increase  of  72  per  cent.  This  increase  was  due  princi- 
pally to  tlie  increased  prices  of  salmon  in  the  latter  year.  When 
the  operating  expenses  were  deducted  from  the  net  brokerage, 
there  remained  an  average  net  profit  of  5  cents  per  case  in  1916  and 
7.5  cents  per  case  in  1917.  This  represents  an  increase  of  50  per 
cent,  and  shows  that  only  a  part  of  the  increased  brokerage  was 
taken  up  by  increased  operating  expenses.  However,  none  of  these 
three  companies  kept  records  whicii  made  it  possible  to  make  an 
entirely  satisfactory  distribution  of  operating  expenses  between 
their  brokerage  business  and  their  merchandising  business.  In 
distributing  these  expenses,  it  was  necessary  to  prorate  between  the 
two  kinds  of  business  on  the  basis  of  sales.  This  probably  placed 
too  heavy  a  burden  on  the  brokerage  department,  and  consequently 
the  net  profits  on  brokerage  sales  were  probably  larger  than  shown 
in  the  table. 

Figures  for  earnings  on  the  merchandising  or  buy-and-sell  business 
are  shown  for  only  one  company  in  1916  and  for  two  companies  in 
1917.  The  gross  profits  were  larger  than  on  the  brokerage  business 
in  two  out  of  the  three  instances,  and  as  no  sub-brokerage  was  paid, 
the  net  profit  was  relatively  even  larger.  If  a  proper  distribution  of 
operating  expenses  could  have  been  made,  these  figures  might  have 
been  somewhat  reduced,  but  would  still  have  shown  a  greater  profit 
than  the  brokerage  business  except  for  one  company  in  1917. 

Two  out  of  three  of  the  average  sales  values  in  merchandising 
transactions  were  higher  than  the  sales  values  shown  in  the  broker- 
nge  business,  and  the  lower  value  shown  was  due  to  a  lower  grade 
of  fish. 


CHAPTER  VI. 

OEGAKIZATION   AND    COITTROL   IIT   THE    SALMON    CAITirnrG 

INDUSTRY. 

Section  1.  Advantages  of  large  companies. 

From  a  business  point  of  view  there  are  several  advantages  in  large- 
scale  production  and  also  in  large  business  units  controlling  several 
salmon  canneries.  Among  these  are  reduction  of  local  hazard,  better 
credit  facilities,  ability  to  own  a  fleet,  and  ability  to  secure  and 
to  utilize  the  best  trap  locations. 

A  company  with  several  canneries  is  able  to  equalize  or  absorb 
local  losses  without  incurring  a  deficit  for  the  season.  The  salmon 
run  varies  from  year  to  year,  not  only  from  district  to  district,  but 
within  any  one  district.  A  large  company  may  have  a  small  run  in 
one  locaHty,  thus  depletmg  the  supply  of  raw  fish  for  one  cannery,  but 
it  is  not  hkely  to  have  a  small  run  m  every  locality.  For  instance, 
a  company  with  six  plants  in  1917  lost  $115,000  at  one  plant  and  yet 
made  a  net  profit  on  canning  operations  of  over  $1,000,000.  A 
canner  with  only  one  plant,  however,  especially  if  in  a  location  where 
fish  run  irregularly,  may  have  very  uncertain  profits.  One  year  his 
profits  mayl)e  very  large  and  the  next  year  he  may  have  a  heavy 
loss. 

A  large  amouiit  of  seasonal  capital  is  needed,  and  in  getting  neces- 
sary banking  support,  the  packer  who  can  show  great  stabihty  over 
a  period  of  years  has  the  advantage  A  packer  should  also  show 
considerable  surplus,  so  as  to  be  able  to  withstand  a  poor  season. 
The  large  canner  has  a  distinct  advantage  over  the  small  canner, 
speaking  generally,  in  the  seasonal  borrowing  of  capital.  The  la^e 
companies,  with  their  large  output  and  with  capital  or  credit  suffi- 
cient to  carry  the  bulk  of  their  pack  for  several  months,  also  have 
an  advantage  in  the  marketing  of  their  product.  In  recent  years  the 
Puget  Sound  canners  have  experienced  more  credit  difficulties  than 
the  Alaska  canners  who  have  offices  in  San  Francisco.  These  largo 
Alaska  companies  have  been  able  to  build  up  strong  banking  con- 
nections. 

A  large  canner  is  able  to  own  his  own  fleet  and  this  is  another 
advantage,  for  it  gives  him  greater  certainty  of  getting  his  supplies 
and  enables  him  to  move  materials  and  labor  from  one  plant  to 
another  as  necessitated  by  the  size  of  the  salmon  run  in  various 
localities.  The  large  canner  is  also  able  to  spend  more  money  for 
exploration  or  search  for  new  trap  locations,  or  to  buy  desirable 
locations  from  others.  The  control  of  such  desirable  locations  gives 
such  canners  a  decided  advantage. 

69 


70 


KEPORT  OF  CAK2^ED  FOODS. 


Section  2.  Tlie  size  of  tlie  companies  and  plants  from  a  social  point  of 

view. 

In  the  salmon  canning  industry  centralization  of  control  had 
reached  such  a  point  in  1917  that  five  companies,  or  groups  of  com- 
panies, with  a  unified  control,  in  1917,  packed  53.4  per  cent  of  the 
total  output.  The  advantages  enumerated  on  the  preceding  page — 
and  not  a  lower  cost  of  production—seem  to  have  led  to  the  growth 
of  these  large  comoanies.  The  figures  presented  in  Table  21,  of 
Chapter  III,  gave  the  costs  of  production  at  typical  plants  having 
large  and  small  outouts,  located  in  Southeast  Alaska,  West  Alaska, 
and  the  Puget  Sound  districts,  and  prove  that  the  cost  of  production 
varied  with  the  size  of  the  pack  in  each  plant  rather  than  with  the 
size  of  the  company  which  controlled  the  plant.  The  reasons  for 
this  fact  were  mentioned  in  section  2  of  Chapter  III. 

It  seems  reasonably  clear,  then,  that  the  large  companies  have 
shown  no  exceptional  efficiency  and  that  their  size  has  redounded  to 
their  own  advantage  rather  than  to  that  of  the  public.  In  this  in- 
dustry large  and  efficient  plants  rather  than  large  companies,  perhaps 
resulting  from  the  consolidation  of  a  number  of  small  plants,  would 
be  socially  desirable.  A  further  centralization  of  control,  therefore, 
could  offer  no  economies  which  would  balance  the  dangers  of  monopoly 
in  the  industry. 

Ill 

Section  3.  The  companies  tiat  dominate  the  industry. 

The  Alaska  Packers  Association  ^  is  the  largest  single  producer  of 
salmon  and  packed  1,346,292  ctises  in  1917.  This  corporation  is  con- 
trolled by  the  California  Packing  Corporation,  through  the  owner- 
ship of  79  per  cent  of  its  stock.  All  the  product  sold  in  the  United 
States  (783,413  cases  in  1917)  is  marketed  through  the  California 
Packing  Corporation  on  a  commission  basis. 

The  California  Packing  Corporation  was  sales  agent  for  the  MacLeay 
Estate  Co.,  the  Warren  Packing  Co.,  and  the  Columbia  River  Packers 
Association.  This  latter  company  packed  217,581  cases  in  1917,  but 
less  than  2|  per  cent  of  this  pack  was  handled  by  the  California 
Packing  Corporation.  In  1917  theCahfornia  Packing  Corporation  also 
handled  61 ,575  cases  for  other  companies.  The  Alaska  PacJ<ers  Associa- 
tion is  affiliated  with  the  Naknek  Packing  Co.  through  the  common 
ownership  of  57.6  per  cent  of  its  stock.  The  directors  of  the  Naknek 
Packing  Co.  owii  84.9  per  cent  of  the  stock  in  the  Red  Salmon  Can- 
ning Co.,  the  directors  of  the  two  companies  being  practically  identical. 
The  numbers  of  cases  packed  by  these  companies  m  1917  were:  Alaska 
Packers  Association,  1,346,292;  Naknek  Packing  Company,  87,732; 
Red  Sahnon  Canning  Company,  96,485;  MacLeay  Estate  Co.,  20,551; 
Warren  Packing  Co.,  32,797.  The  total  packed  by  these  companies 
was  1,583,857  cases,  or  18.4  per  cent  of  the  total  year's  pack. 

It  has  come  to  the  attention  of  the  Commission  that  Elisha  Walker, 
one  of  the  controlling  factors  of  Wilson  &  Co.,  has  lately  been  made 
a  director  of  the  California  Packing  Corporation. 

The  Deming  &  Gould  or  Pacific  American  Fisheries  group  is  the 
second  most  important  factor  in  the  industry.    The  Pacific  American 

» 8«e  S«c.  1,  ol  Chap.  I.  ' 


REPOKT  ON  CANNED  FOODS. 


71 


Fisheries'  controls  several  other  companies  through  the  common  own- 
ership of  stock,  interlocking  directorates  or  advances  of  money.  The- 
Hoonah  Packing  Co.  is  controlled  through  the  ownership  of  39.2 
per  cent  of  its  stock  by  the  Pacific  American  Fisheries  Co.  and  14.7 
per  cent  more  by  Pacific  American  Fisheries  stockholders.  These  two 
companies  also  have  the  same  president  and  the  Pacific  American 
Fisheries  advanced  the  Hoonah  Packing  Co.  $100,000  (as  of  Dec.  31, 
1917).  Four  of  the  five  directors  of  the  Nelson  Lagoon  Packing  Co. 
are  also  directors  of  the  Pacific  American  Fisheries.     At  least  72 

£er  cent  of  the  stock  is  owned  by  Pacific  American  Fisheries  stock- 
olders  and  24  per  cent  is  owned  by  members  of  a  large  New  York 
brokerage  firm.  Tlie  'Nelson  Lagoon  Packing  Co,  was  also  advanced 
$57,000  on  its  note  by  Deming  &  Gould.  The  Friday  Harbor  Pack- 
ing Co.  is  controlled  through  the  ownership  of  25  per  cent  of  its  stock 
by  the  Pacific  American  Fisheries  stockholders  and  an  advance  of 
$5,128.75  (as  of  Dec.  31,1917)  has  been  made  by  the  same  company. 
The  number  of  cases  packed  by  these  companies  in  1917  was  as 
follows : 

The  Pacific  American  Fisheries  Group:  Cases. 

Pacific  Araerican  Fisheries 434, 265 

Hoonah  Packing  Co 231,  656 

Friday  Harbor  Packing  Co 53, 560 

Nelson  Lagoon  Packing  Co 25, 474 

Total 744,955 

The  president  of  the  Pacific  American  Fisheries  is  president  of  the 
brokerage  firm  of  Deming  &  Gould,  and  with  another  member  of  his 
family  owns  all  of  the  stock  of  this  firm.  The  firm  of  Deming  &  Gould 
is  a  very  large  factor  in  the  marketing  of  salmon  and  has  the  exclusive 
sales  agencv  for  ten  canners,  for  whom  it  sold  623,790  cases  in  1917. 
Deming  &  txould  in  addition  to  its  exclusive  agency  for  the  Pacific 
American  Fisheries  and  its  directly  controlled  companies,  is  the  ex- 
clusive agent  for  the  following  companies:  Point  Warde  Packing 
Co.  (United  States  only),  Copper  River  Packing  Co.  (United  States 
only),  Hillside  Canning  Co.,  Key  City  Packing  Co.,  San  Juan  Can- 
ning Co.  (advances  were  made  to  this  company  by  Deming  &  Gould 
and  by  a  stockholder  of  Pacific  American  Fisheries)  and  Bellingham 
Canning  Co. 

The  number  of  cases  packed  by  these  companies  in  1917  was  as 
follows : 

Pacific  A.merican  Fisheries  with  controlled  companies 744, 955 

Point  Warde  Packing  Co 38,907 

Copper  River  Packing  Co 48, 328 

Hillside  Canning  Co -  26,443 

Key  City  Packing  Co 31,99» 

San  Juan  Canning?  Co 34, 654 

56,198 


Bellinsrham  Canninsr  Co. 


Total  number  of  cases  packed  by  controlled  companies 981, 483 

This  was  11.4  per  cent  of  the  total  American  pack  in  1917. 

In  addition  to  the  foregoing,  the  Valdez  Packing  Co.  and  the  Nook- 
sack  Packing  Co.  appear  to  be  affiliated  with  this  group.  The  former 
company  has  one  ana  the  latter  company  has  two  stockholders  in  com- 

"  I  The  officers  and  directors  of  this  company  are  reported  to  he  as  follows:  E.  B .  Peming.  president:  A .  AV . 
Deming,  vice-president:  S.  C.  Scotten,  treasurer:  C.  M.  Mitchell,  secretary;  J,  G.  SnydaeVer,  second  vice, 
president.  The  directors  are:  U.  H.  Hitchcock,  E.  B.  Deming,  S.  C.  Scotten,  J.  G.  Snydacker,  George  B- 
Harris,  S.  B.  Steele,  J.  F.  Harris,  F.  C.  Letts,  C.  E.  Wilcox. 


4' 


'72 


RBPOBT  OH  CANNED  FOODS. 


ht 


mon  with  the  Pacific  American  Fisheries.  The  Nooksack  Packing  Co. 
IS  in  turn  closely  affiliated  with  the  Thlinket  Packing  Co.  The  presi- 
dent and  largest  stockholder  of  the  fonner  is  the  president  and  a 
director  of  the  latter. 

CompanieB  apparently  affiliated  with  the  Pacific  American  Fisheries:  cases 

Yaldez  Packing  Co.. 34,936 

Nooksack  PacMng  Co 55  7904 

Thlinket  Packing  Co 128'l52| 


Total... 


218, 87» 


The  Booth  Fisheries  Company*  is  one  of  the  largest  canners  of 
salmon.  This  company  formerly  owned  the  Northwestern  Fisheries 
Co.  and  the  Anacortes  Fisheries  Co.,  but  these  companies  have  now 
been  consolidated  with  the  parent  company,  being  known  as  de- 
partments A  and  B.  The  Booth  Co.  also  has  a  cannery  at  Astoria, 
Oregon.  The  output  of  these  plants  in  1917  was:  Astoria  plant, 
33,468;  department  A,  472,750;  department  B,  251,559.  This  made 
a  total  of  757^77  cases,  or  8.8  per  cent  of  the  year's  output. 

The  Booth  Fisheries  Co.  marketed  a  large  part  of  its  salmon 
through  Gorman  &  Co.,  a  salmon  brokerage  firm  of  Seattle.  Gor- 
man &  Co.  is  the  sole  agent  for  the  Astoria  and  Anacortes  branches, 
except  that  part  of  the  pack  sold  through  the  company's  own  or- 
ganization, and  along  with  Kelley-Clarke  Co.  have  the  same  rights 
for  the  Northwestern  branch  (department  A).  Gorman  &  Co.  also 
own  1,437  shares  of  the  preferred  stock  of  the  Booth  Fisheries  Co., 
which,  however,  has  no  voting  power. 

Gorman  &  Co.  was  the  exdusive  agent  for  four  other  companies 
and  also  advanced  three  of  them  large  amounts  of  money.  These 
companies  with  the  number  of  cases  packed  in  1917  were  as  follows: 

Cases. 

West  Coast  Packing  Co. 46  406 

Tenakee  Fisheries  Co ....I...'.,         35* 32» 

S^tnlghtB Packing  Co.. , .*[ 33' 033 

'Salmon  .Bank  Canning  Co '..*."*,"'*'.'*    31,'  105 

Total. 145  gyg 

Salmon  handled  during  year  for  others 1 1 . . . . . . . . .  1 . .  1 1  ]  1 1  [. . .  I    38*,  993 

In  1917  a  large  part  of  the  Northwestern  Fisheries  Go's,  pack  was 
marketed  by  the  brokerage  firm  of  Kelley-Clarke  Co.  of  Seattle,  which 
was  the  exclusive  sales  agency  for  four  other  American  salmon  can- 
ners. These  companies  with  the  number  of  cases  packed  in  1917, 
were  as  follows: 


REPORT  OK  CANNED  !F00DS. 


73 


Alaika  Sanitary  Packing  Co 

Ainsworth  4  Dunn 

C!oast  Fish  Co 

€aBcade  Packing  Co. 


Cases. 

42,838 
71,803 
44,994 
49,296 


Total. 208  931 

Salmon  handled  during  the  year  lor  others [..!"[]."  1  [!  1  ]"  *    85^  209 

The  total  1917  nack  of  the  Booth  plants  and  of  the  companies  for 
whom  Gorman  &  Co.  and  Kelley-Clarke  Co.  were  exclusive  sales  agents 
was  1,112,586  cases,  or  13  per  cent  of  the  1917  pack. 

The  firm  of  Libby,  McNeil  &  Libby,  whidh  is  controlled  by 
Swift  &  Co.  and  the  stockholders  of  which  are  large  holders  of  the 

w  T?®w®i?®"  ^'  ^^^  company  are  K.  L.  .\mes.  president;  P.  L.  Sraithers,  vice-president  and  treasurer. 
iL2;31**  *rTSZ  »?**/S|'^^.^nt  *''®^?"^5\S  V?-  l:  ^'l-chjan.  assistant  secretary.    The  following  ar^ 


preferred  stock  of  Wilson  &  Co.,  purchased  and  took  over  the  North 
Alaska  Salmon  Co.  in  November,  1916,  which  with  plants  previ- 
ously owned  made  it  one  of  the  largest  canners  of  salmon.  In  1917 
the  eight  plants  of  Libby,  McNeil  &  Libby  packed  435,077  cases,  or 
6.1  per  cent  of  the  year's  output.  Libby,  McNeil  &  Libby  sold  the 
entire  pack  of  the  Taku  Canning  &  Cold  Storage  Co.,  of  Seattle, 
under  the  buyers'  labels  and  received  therefor  a  10  per  cent  com- 
mission. Libby,  McNeil  &  Libby  thus  had  practically  complete  con- 
trol of  the  output  of  this  company.  The  Auk  Bay  Salmon  Co.  was 
controlled  by  officers  and  stockholders  of  the  Taku  Canning  &  Cold 
Storage  Co.  These  two  companies  together  packed  128,163  cases 
in  1917.  These  packs  combined  with  Libby,  McNeil  &  Libby's  own 
output  made  a  total  of  563,240  cases,  or  6.5  per  cent  of  the  year's 
"  output. 

The  fifth  of  the  large  groups  is  the  Wilson- Wakefield  group,  dom- 
inated by  Wilson  &  Co.,  of  Chicago,  who  entered  the  salmon  business 
in  February,  1917.  The  Wilson  Fisheries  Corporation,  51  per  cent 
of  whose  stock  is  owned  by  Wilson  &  Co.  and  49  per  cent  by  Lee  H. 
Wakefield,  an  established  factor  in  the  canning  and  marketing  of 
salmon,  owns  995  out  of  1,000  shares  of  the  capital  stock  of  J.  L. 
Smiley  &  Co.  and  245  out  of  250  shares  of  the  Alaska  Herring  & 
Sardine  Co.  Another  company  controlled  by  the  Wilson  Fisheries 
Co.  is  the  Lisianski  Packing  Co.,  with  a  new  plant  said  to  be  excep- 
tionally well  located  on  Stag  Bay,  Linianski  Strait,  Alaska.  This 
plant  was  ready  for  operation  in  1918. 

Mr.  Wakefield  is  president  of  the  Wilson  Fisheries  Co.;  president 
and  a  stockholder  of  J.  L.  Smiley  &  Co.  and  the  Alaska  Herring  & 
Sardine  Co.;  owner  of  498  out  of  500  shares  of  the  Apex  Fish  Co.; 
and  is  president  and  owner  of  100  out  of  300  shares  of  the  stock  of  the 
Northland  Fish  Co.,  the  other  200  shares  being  held  by  men  who  are 
directors  in  one  or  more  of  the  companies  mentioned  above. 

This  merger  of  the  Wilson  and  Wakefield  interests,  according  to  a 
leading  trade  journal,*  is  expected  to  have  "far  reaching  results  in  the 
development  of  the  Pacific  fisheries." 

Mr.  Wakefield  is  also  the  owner  of  the  brokerage  firm  of  Wakefield 
&  Co.,  which  is  the  exclusive  selling  agency  for  the  Apex  Fish  Co., 
the  Pure  Food  Fish  Co.,  the  Shaw  Island  Packing  Co.,  the  Beegle 
Packing  Co.,  the  Northland  Fish  Co.,  the  Liberty  Packing  Co., 
R.  L.  Cole,  the  Alaska  Herring  &  Sardine  Co.  and  for  49  per  cent  of 
the  pack  of  the  J.  L.  Smiley  &  Co.  In  1917  Wakefield  &  Co.  han- 
dled 28,358  cases  of  salmon  for  others  than  the  companies  mentioned. 

The  companies  composing  this  group  and  the  number  of  cases 
packed  by  them  in  1917  were  as  follows: 

Cases. 

J.  L.  Smiley  &  Co 114,803 

Alaska  Herring  &  Sardine  Co 24,330 

Apex  Fish  Co 110,975 

Northland  Fish  Co 18,632 

Pure  Food  Fish  Co 33,963 

Beegle  Packing  Co 33, 743 

Shaw  Island  Packing  Co 7,292 

R.L.Cole 885 

Liberty  Packing  Co 9, 021 

Total  number  of  cases  packed  or  controlled  by  Wilson-Wakefield 
interests 353, 704 

»  Pacific  Fisherman,  January,  1918,  p.  95. 


14. 


REPOBT  OK   CANNED  FOODS. 


Tliis  was.  4.1  per  cent:  of  the  total  pack  in  1917. 

These  five  groups  (or  four  if  Libby  and  Wilson  are  considered  as 

one  group )^  in  1917  packed  4,594,870  cases  or  53.4  per  cent  of  the 
total  American  output,,  as  follows: 


Coses. 


Alstska  Packers  Association  and  allllialed  companies 

Beming  Ai  tJrmld-- Pacific  American  jiroup 

Booth  Fisheri<*s.  (lorman  A-  Co.,  and  Kellev-Clark  Co.  group 

Libliy,  McNeil  &  Libbv  and  afllliated  companies 

Wilson-W'akefleld  group 


Total 


1,583,857 
981,483 

Sfi:^,240 

353, 704 


4.694.870 


Per  c«nt 

of  total 

paik. 


18/4 

n.4 

13.0 
6.5 
4.1 


53.4 


Tlie  inimber  of  cases  of  salmon  handled  during  1917  by  the  selling 

agencies  included  in  tlie  above  groups  for  companies  not  included  in 

these  groups  was  214,135,  which  was  equivalent  to  2.5  per  cent  of  the 


There  are  several  other  smaller  groups  of  affiliated  companies,  but 
the  above  are  the  largest  and  most  important  in  the  industry.  The 
control  of  over  53  per  cent  of  the  production  of  an  essential  food  by 
five  groups  of  companies  shows  great  concentration  of  control,  and,  as 

Mas  been'  shown  (Section  1,  Chapter  IV),  two  of  these  companies 
make  the  prices  at  wliich  tht^  great  majority  of  tlie  packere  dispose  of 


Section  4.  Relation  witii  outside  interests. 

Several  of  the  large  Chicago  meat  packei-s  are  important  in  the 

salmon  canning  uidustry.  Tlie  interests  of  Libby,  McNeil  &  Libby 
(Swift  &  Co.)  and  of  Wilson  &  Co.  have  already  been  mentionedf. 
The  Cudahy  Brothers  Co.  and  Armour  &  Co.  appear  to  be  closely 
affiliated  w'ith  large  salmon  canning  com|>anies.  Among  tlie  stock- 
holdera  of  the  Pacific  American  Fisheries  appear  the  names  of 
members  of  the  Cudahy  family,  of  the  Cudahy  Brothers  Co.,  The 
Western  Grocer  Co.,  of  Chicago,  is  a  stockholder,  and  its  president, 
Mr.  F.  C.  Letts,  is  both  a  stockholder  and  a  director  in  ttie  Pacific 
American  Fisheries  Co.     The  Booth  Fisheries  Co.  was  reorganized  in 


19,  and  the  reorganization  committee  was  composed  of  1<.  C.  Letts 
1  P.  A.  Valentine,  of  Armour  &  Co.     Mr.  Letts  was  the  first  presi- 
dent of  the  reorganized  Booth  Fisheries  Co.     These  facts  show  that 

the  Booth  Fisheries  Co.  formerly,  at  least,  w^as  closely  connected  with 
both  tlie  Pacific  American  Fisheries  Co .  and  Armour  &  Co .  Two  of  the 
stockholders  of  the  Pacific  American  Fisheries  Co.  are  conru^cted  with 
two  of  the  large  Chicago  wholesale  grocery  firms,  S.  B.  Steele  is 
president  of  the  Steele,  Wedeles  Co.,  and  €'.  E.  Wilcox  is  head  of  the 
canned  goods  department  and  a  director  of  Sprague,  Warner  &  Co» 
Evidence  shows  that  the  California  Packing  Corporation  (Alaska 
Packei*s  Association)  works  in  harmony  with  Armour  &  Co.,  of  Chi- 
cago, keeping  the  Chicago  firm  advised  as  to  market  conditions,  etc., 


fornia  Packing  Corporation. 


CoAPTEIv  VII. 

LEGISLATIOH  TO  PEOTECT  THE  SUPPLY  OF  SAIMON. 

Fears  have  long  been  expressed  that  the  supply  of  salmon  would 
soon  become  seriously  depleted.  As  far  back  as  1889  Congress 
passed  a  law  against  barricading  and  fencing  streams  in  Alaska.  Th© 
Secretary  of  the  Treasury,  in  1900,  ordered  that  all  Alaska  salmon 
canners  construct  and  operate  private  hatcheries.  This  seems  to 
have  been  an  impossible  requirement  so  far  as  the  small  packers 
were  conceiiied,  and  was  rescinded  in  1906.     Some  of  the  large  com- 

E allies,  however,  operate  hatcheries.  In  1917  there  were  four  salmon 
atcheries  operated  by  American  companies  in  Alaska.  In  the  same 
year  the  United  States  Bureau  of  Fisheries  operated  22  salmon  hatch- 
eries, of  which  2  were  in  Alaska;  46  hatcheries  were  operated  by  the 
Pacific  Coast  States;  11  w^ere  operated  by  Canada;  and  1  was  oper- 
ated by  the  Province  of  British  Columbia.  These  hatcheries  con- 
serve the  supply  of  fish  by  protecting  the  eggs  from  being  devoured 
by  fish  or  from  being  destroyed  in  other  ways.  In  addition,  some 
hatcheries  rear  the  young  fish  untO  they  are  partially  grown.  Most 
of  the  young  fish  are  released  when  in  the  ''fry"  stage  or  w^hen  about 
30  days  old.  However,  in  recent  years  many  fish  have  been  reared  in 
nursery  ponds  until  therefore  large  enough  to  have  an  even  better 
chance  for  their  lives  than  if  released  in  the  fry  stage.  Such  fish  are 
known  as  fingerlings  or  yearlings.  The  output  of  the  salmon  hatcheries 
increased  until,  in  addition  to  eggs,  a  total  of  535,401,818  fry  and 
18,245,575  fingerlinp,  yearlings,  or  adults  were  distributed  in  the 
streams  of  the  Pacific  Coast  of  North  America  in  1915.  In  addition, 
a  large  number  of  eggs  and  fry  were  shipped  to  other  sections. 

Wood  River,  which  empties  into  Nushagak  Bay,  in  West  Alaska, 
has  been  set  aside  as  a  breeding  preserve  for  salmon.  A  rack  has 
been  constructed  across  the  entrance,  and  the  fish  are  counted  as 
they  pass  though  a  tunnel  in  this  rack.  The  number  of  salmon  that 
have  passed  into  the  Wood  River  has  decreased,  as  is  shown  by  the 
following  figures:  1908,  2,600,655;  1909,  893,244;  1915,  259,341; 
1916,  551,956.     (Figures  from  Bureau  of  Fisheries.) 

Besides  the  inroads  made  upon  the  salmon  supply  by  fishing  oper- 
ations and  natural  enemies,  the  pollution  of  the  streams,  the  con- 
struction of  dams  without  adequate  fishwa3"s,  and  the  failure  to 
place  screens  at  the  head  of  all  irrigation  ditches  connecting  with  the 
streams  on  the  Pacific  Coast  also  present  grave  dangers. 

Two  bills  for  the  protection  of  the  salmon  and  the  regulation  of  the 
fishing  industry  in  Alaska  have  been  introduced  and  are  now  (July, 
1918)  pending' before  Congress.  One  of  these  bills,  known  as  the 
Sulzer  bill  (H.  R.  9092),  is  said  to  be  indorsed  by  the  people  of  Alaska 
and  is  opposed  by  the  salmon  canners.  The  other  biU,  knowm  as  the 
Alexander  bill  (H.  R.  1753),  is  based  upon  data  gathered  by  Govern- 
ment committees,  and  is  indorsed  by  tlie  canners  and  the  Bureau  of 
Fisheries. 

75 


I 


76 


RBPOBT  OH  CANNED  FOODS. 


The  Sulzer  bill,  in  order  to  protect  the  salmon,  abolishes  the  weekly 
closed  day  (Sunday)  and  in  lieu  thereof  provides  that  all  salmon  fishing 
and  canning  operations  shall  close  in  Bering  Sea  on  August  1,  in  the 
Gulf  of  Alaska  on  August  15,  and  in  southeast  Alaska  on  September  1. 
The  cimners  object  to  this  provision  for  two  reasons:  First,  they  claim 
that  it  would  necessitate  fishing  on  Sunday,  to  which  they  say  the 
fishermen  are  opposed;  second,  they  claim  that  the  abolition  of  the 
weekly  closed  period  would  lead  to  an  exhaustion  of  the  supply  of 
salmon.     The  Alexander  bill  retains  the  present  weekly  closed  day. 

Both  bills  include  regulations  prescrioing  the  size  of  streams  in 
which  commercial  fishing  may  be  carried  on,  the  size  of  nets,  seines, 
and  traps  which  may  be  used,  the  size  of  passageways  which  must  be 
left  between  Exod  fishing  apphances.  The  provisions  of  this  kind  in 
the  two  bills  are  similar,  but  those  in  the  Sulzer  bill  appear  to  be 
designed  to  restrict  operations  somewhat  more  closely  than  those 
in  the  Alexander  bill.  Some  canners  oppose  certain  details  in  each 
bil  as  being  impracticable  or  as  being  unfair  to  the  canners  in  certain 
localities. 

The  bills  differ  materially  with  regard  to  the  rights  of  the  canners  to 
maintain  trap  and  net  locations.  At  present,  leases  for  such  locations 
in  Alaska  are  only  good  for  one  year.  Theoretically,  all  such  locations 
are  open  to  the  first  comer  each  season.  Practically,  however,  the 
canners  and  fishermen  observe  "squatter  sovereignty"  and  the  canner 
who  occupijes  a  trap  or  net  location  every  year  seldom  has  it  "jumped. " 
Canners  with  desirable  trap  locations  undoubtedly  enjoy  a  distinct 
advantage  over  those  who  have  less  desirable  sources  of  raw  fish. 
The  canners  would  like  to  have  a  greater  security  in  their  rights  to  such 
locations,  and  would  like  to  hold  locations  which  are  not  fished  every 
year.  The  Sulzer  bill  provides  for  five-year  leases  which  may  be 
renewed  at  the  end  of  each  five-year  period.  The  Alexander  bill  pro- 
vides for  a  15-year  lease,  at  the  end  of  which  period  the  location 
reverts  to  the  United  States  and  may  be  leased  to  any  applicant. 

Fears  have  been  expresssed  that  under  a  system  of  long  leases  the 
good  locations,  which  are  limited  in  number,  would  all  pass  into  the 
possession  of  a  few  large  canners,  and  that  this  would  prevent  new 
companies  from  entering  the  industrv.  (See  Chapter  VI.)  The 
small  canners,  however,  lave  expressea  no  fear  to  the  Commission 
that  the  long  leases  provided  for  by  the  .Vlexander  bill  would  lead  to 
monopoly. 

The  Sulzer  bill  provider  elaborate  machinery  for  its  enforcement, 
which  the  canners  say  would  entail  unnecessary  expense.  The 
Alexander  biU  leaves  the  enforcement  of  the  law  to  the  Secretary  of 
Commerce, 

The  Sulzer  biE  levies  a  tax  of  10.01  for  each  salmon  caught.  The 
canners  say  this  tax  is  altogether  too  high.  The  Alexander  bill  pro- 
vides license  fees  for  the  operation  o^  nets,  traps,  wheels,  etc.,  and  a 
production  tax  for  each  case  packed  as  follows:  $0.06  for  red  and 
kinoj,  $0.05  for  medium  red  and  steelhead,  $0.04  for  pink  and  chum. 

The  Sulzer  bill  gives  the  Territory  of  Alaska  the  right  to  levy  addi- 
tional taxes  or  to  appeal,  alter,  or  amend  the  law  in  any  respect.  The 
canners  are  opposed  to  giving  the  Territory  of  Alaska  any  authority 
to  regulate  the  industry,  and  favor  leaving  all  control  with  the  United 
States  Government,  as  the  Alexander  bill  provides;  while  many  of  the 
people  of  Alaska  beheve  that  the  Alexander  biU  would  unduly  deprive 


RIPORT  ON  CANNED  FOODS. 


77 


that  Territory  of  control  over  its  salmon  resources  and  tend  to  dehver 
those  resources  into  the  hands  of  a  few  large  corporations. 
The  Alexander  bill  provides,  in  section  6,  the  following: 

That  any  person  occupying,  or  desiring  to  occupy,  any  location  where  it  may  be 
lawful  to  construct  a  pound  net  in  the  waters  of  Alaska  shall  cause  such  location  to 
be  accurately  surveyed  by  a  competent  engineer,  unless  the  survey  thereof  has  already 
been  made,  in  which  event  such  existing  survey  may  be  used,  and  shall  cause  three 
maps  to  be  made  of  such  location  from  the  actual  survey  thereof,  which  shall  contain 
a  plat  and  description  of  said  fishing  location  for  its  ascertainment  and  identification 
on  the  premises.  Said  maps  shall  also  contain  a  certificate  by  the  claimant,  or  by  his 
agent  or  attorney,  stating  that  he  claims  the  fishing  location  shown  thereon,  8pecif>dng 
the  date  and  number  of  the  license  under  which  the  same  is  held,  or  the  fact  that  appli- 
cation has  been  made  therefor.  Such  maps,  with  the  certificate  thereon,  shall  be 
filed  in  the  ofllce  of  the  commissioner  of  records  in  the  districts  wherein  the  location 
is  situated,  which  commissioner  shall  indorse  thereon  the  hour  and  date  of  filing,  and 
shall  forward  one  of  these  maps  to  the  Secretary  of  Commerce  and  another  to  the 
Pacific  Coast  office  of  the  Bureau  of  Fisheries.  From  and  after  the  date  of  filing  in  the 
oflSce  of  the  commissioner  of  records,  such  maps  shall  constitute  full  and  complete 
notice  that  the  locator  has  complied  with  all  the  provisions  of  this  act  and  that  such 
location  is  owned,  held,  occupied,  and  claimed  by  the  person  designated  thereon  as 
the  claimant.  From  and  after  the  filing  of  such  maps  the  claimant  of  the  fishing 
location  shown  thereon,  his  heirs,  administrators,  executors,  successors,  and  assigns 
shall  have  the  right  to  hold,  occupy,  fish  in  such  location,  to  renew  the  license  there- 
for, and  to  mortgage,  sell,  and  transfer  the  same  during  the  time  that  he  or  they  in 
otiier  respects  shall  comply  with  the  law  pertaining  thereto:  Provided,  That  it  shall 
not  be  necessary  to  file  any  map  or  plat  of  any  fishing  location  before  January  first  of 
the  calendar  year  next  after  this  act  takes  effect. 

►  It  shall  not  be  necessary  to  file  any  map  or  plat  of  any  fishing  location  in  any  case 
where  any  map  or  plat  has  heretofore  been  filed  with  the  Secretary  of  Commerce  and 
the  commissioner  of  records  in  the  district  in  which  the  location  is  situated.  All  the 
pound  net  or  other  fishing  locations  lawfully  occupied  during  the  calendar  year  next 

f)receding  the  passage  of  this  act  shall  continue  valid:  Provided,  That  if  any  owner  or 
ocator  shall  fail  to  construct  and  operate  his  appliance  in  a  bona  fide  manner  for  the 
three  consecutive  years  covered  by  his  license,  the  location  shall  be  deemed 
abandoned. 

Clearly  the  trend  of  such  a  measure  would  be  to  place  securely  in 
the  hands  of  the  present  occupiers  the  pound-net  locations  now 
operated,  and  would  facihtate  the  acquisition  of  long-time  rights  in 
new  locations.  While  a  reasonable  securitjr  of  tenure  is  desirable,  it 
is  doubtful  if  sufficient  limitations  are  contained  in  the  Alexander  bill 
or  similar  measures.  In  the  first  place,  no  right  should  be  granted  to 
hold  a  net  location  unused  for  more  than  a  snort  period;  and,  in  the 
second  place,  the  maximum  period  for  which  a  location  should  be  held 
by  a  given  interest,  whether  operated  or  not,  should  not  be  so  long  as 
15  years.  It  would  seem  reasonable,  and  appears  to  be  in  accord 
with  the  ideas  of  those  who,  while  famihar  with  the  problem,  are 
unbiased,  that  the  maximum  period  for  which  a  location  may  be  held 
should  be  limited  to  about  five  years,  and  that  the  holder  be  required 
to  operate  the  location  at  least  as  often  as  every  other  year  and  three 
years  out  of  the  five. 


r 


CHAPTER  Vni. 
8¥OG1STIO¥S  FOl  THE  IMPIOVEMEFT  OF  COMITIOW S  HI  THE 

iilfJi.UJN    l/AiNJNlJHlJ   iJlilUoXAl. 

OBly  a  part  of  the  roconimenclations  made  by  the  Commission  in 
ite  general  report  on  Canned  Foods*  have  any  application  to  [\w 
salmon  canning  industry.  t.h(^  nature  of  which  is  in  manv  respects 
different  from  the  other" l)ranc]ies  of  the  canning^  industry.  ^ 
^  innfral  reemn'memlat^  -  .  — Tlie  rccoinmendations  in  the  Commis- 
sion's general  canned-foods  report  on  (1)  economy  in  boxes,  (2)  the 
further  standardization  of  grad(^s,  (2)  the  regulation  of  the  use  of 
labels,,  and  (4}  the  restriction  of  unntM-'cssary  r(\selling,  however, 
should  be  ^considered  in  any  regulation  of  the  salmon  industry. 

Prevcptfoii  offnfnre  num^opohi  bff  thf  dftminaM  inl/-7wfe. — ^^Fhe  recom- 
mendations^ in,  the  generarreport ,  which  deal  with  the  control- over 
price  and  with^the  tendencies  toward  ,m,onopoly,  are  of  special  interest 
m.  this  connection.  In  the  canning  of  fruits  ancl  ve^etiil)l(*s,  on  account 
of  the  absence  of  concentration  *  hi,  any  one  lociility  and  the  small 
amount  of  capital  recpiired  to  start  a  new  undertaking,  competition 
naturally  tends  to  be  froci.  Prices  have  been  ,maintained  by  the 
associations  and  not  hy  the  consolidation  of  companies  and  by  the 
centralization  of  control,  lliis  is  not  true  of  the  salmon  industry. 
In  this  industry  the  limited  number  of  valuable  locations  and  the 
large  amount  of  capital  needed  for  an  undertaking  have  led  to  an 
important  degree  of  centrahzation  of  control. 

Pending  before  Congreas  at  present  are  two  bills  for  the  regulation 
of  salmon  fishing  in  Alaska.  These  bills  are  the  Alexander  bill  and 
the  Sulzer  bill.  The  principal  i)oint  at  issue  between  the  advocates 
of  the  two  bills  concerns  the  administrative  autliority.  Both  of  these 
bills  contain  many  excellent  provisions.  The  Sulzer  bill  gives  the 
Territory  of  iUaska  tlu^  liglit  to  alter  or  amend  the  law  in  any  way, 
while  th*e  Alexander  hill  vests  the  administration  of  the  fisheries  m 
the  hands  of  the  United  States  „,Bureau  of  ,Fisheries. 

It  would  seem  to  be  in  the  interest  of  good  administration  that  the 
United  States  Bureau  of  Fisheries  sliould  have  the  same  control  over 
Alaskan  fisheries  that  it  has  elsewhere  in  the  United  States.  Aside 
from  the  question  as  to  who  would  best  administer  a  law  regulating 
the  industiT,  however,  it  is  the  Commission's  judgment  that  no  one 
should  be  allowed  to  hold  for  any  unreasonable  period  the  right  to 
locations  which  are  unused,  for  tliis  might  easily  lead  to  speculation 
and  to  monopoly.  It  seems  clear  tliat  the  title  to  any  location  left  un- 
fislied  for  two  successive  years  slio uld  be  forfeited .  It  also  seems  that 
all  parties  should  ,have  t,l,ie  same  op|)ortui,iity  to  secure  the  rights  to 
such,  locations.  ,Les3ees  should  not-  l)e  allowed  to  renew  their  leases 
,for  successive  j)eriotls  in  such  a  way  as  to  keep  all  others  out,  or  so 
as  to  be  able  to  uion,opolize  sucli  locations.  Newcomers  sho^uld  have 
the  chance  to  secure  such,  locations  l,>y  competitive  bidding  or  in  other 

1  Geneml  Report  Cuuied  Focm1,s:  Fedom,!  Trade  Commission,  Washington,  D.  C,  May,  1915. 

78 


EEPORT  OF  CANNED  FOODS. 


70 


ways.  The  15-year  tenure  of  licenses,  provided  for  in  the  Alexander 
bill  represent  probably  too  long  and  too  complete  a  control  of  the 
valual)le  trap  locations. 

Additional  legislation  to  protect  tlie  supply  of  salmon. — The  need  for 
additional  protection  for  the  salmon  fishing  industry  appears  urgent. 
In  this  respect  the  provisions  of  the  Sulzer  and  Alexander  bills  seem  to 
be  satisfactory. 

Agreement  hetween  Canadian  and  American  iishfrmen.—TheTe  is  a 
need  for  an  agreement  with  the  Dominion  of  Canada  for  a  joint 
regulation  of  fishing  in  Puget  Sound.  During  the  war  an  agreement 
fixing  iHiiform  prices  to  be  paid  for  the  various  species  of  salmon 
caught  in  Puget  Sound  seemed  to  be  advisable. 


Limit  dion  on  mmntenance  of  nominally  separate  sales  ageneirs, — The 
second  recommendation  in  the  Commission's  general  report  on  th© 
canning  industrj',  which  is  of  particular  interest  in  this  connection,  is 
the  *' limitation  on  maintenance  of  nominall}^  separate  sales  agencies." 
It  reads  as  follows : 

It  is  common  m  the  canned-foods  business,  and  notably  so  in  the  case  of  canned  lish, 
to  have  the  entire  pack  of  canneries  handled  by  exclusive  sales  aj^ente,  their  exclusive 
field  covering  either  a  given,locality  or  the  whole  market.  I  n  many  cases  the  packers 
or  stockholders  in  the  canning  companies  are  interested  in  the  selling  agency.  In 
some  cases  the  two  organizations  are  identical.  In  such  cases  the  costs  oithe  selling 
agent  should  be  added  to  the  cost  of  the  canning  company,  and  the  profits  made  bv  tlie 
selling  agent  should  be  regarded  as  intercompany  profits  and  not  included  in  the" can- 
ning companies'  costs.  A  commission  of  5  per  cent,  which  is  often  received  bv  sales 
a|encies,  has  yielded  a  very  large  profit  to  such  agencies,  and  where  they  are  virtually 
identical  with  the  manufacturing  company,  such  profits  are  not  proper! v  included  in 
cost." 

In  the  salmon-canning  industry,  it  seems  that  the  ordinary  broker- 
age of  5  per  cent  could  be  greatly  reduced  by  the  canners  forming 
direct  connections  with  eastern  brokers  and  paying  them  only  the 
ordinary  brokerage  of  2^  per  cent.  The  Pacific  Coast  brokers,  who 
receive  the  5  per  cent  commission,  pay  half  of  it  in  many  cases  as  sub- 
brokerage  to  eastern  brokers,  as  very  few  of  the  Pacific  Coast  brokers 
have  sales  organizations  extending  over  the  country.  Many  can- 
ners have  a  firm  member  act  as  sales  agen*,  and  so  pay  only'2J  per 
cent  or  3  per  cent  brokerage  to  outsiders.  It  does  not  seem  to  be 
economical  for  the  ordinary  salmon  canner  to  maintain  an  expensive 
sales  department  and  to  sell  directly  to  the  wholesale  grocers,  but  it 
does  seem  practical  for  the  medium  and  large  sized  canners  to  establish 
connections  with  eastern  brokers  and  to  reduce  their  marketing  ex- 
pense almost  by  half.  Such  a  practice  should  lead  to  lower  prices 
to  the  consumer. 

Announcement  of  opening  prices. — One  of  two  men  usually  sets  the 
opening  price  of  canned  salmon.  The  highest  figure  set  ordmanly 
prevails.  Inasmuch  as  selling  prices  should  generally  main  tarn  "a 
reasonably  close  relation  to  cost,  the  advisabilitv  of  the  announce- 
ment of  any  opening  price  should  he  Questioned'.  In  anv  case,  the 
present  custom  of  allowing  one  or  two  leading  interests  to  dominate 
the  price  situation  is  fraught  with  danger  to  the  consumer. 

S,  A.  P.  Sal€s.=-~lt  seems  very  douotful  if  the  S.  A.  P.  (subject 
approval  of  price)  sales,  so  coiuinon  m  the  trade,  reallv  sei-ve  any 
good  purpose.  They  may  easily  lead  to  speculative  buVing  on  the 
part  of  the  jobbers,  and  they  do  not  protect  the  canner,  as  he  is  not 
sure  of  his  sales  untd  these  contracts  or  options  are  confuted  or  closed 


80 


EEPORT  ON   CANNED  FOODS. 


in  the  late  summer.  It  seems  that  such  sales  could  be  greatly  limited 
without  any  injury  being  done  the  canners  and  with  much  Benefit  to 
others. 

Prices  of  cans, — The  prices  paid  for  cans  by  different  canners  varied 
considerably.  While  this  was  due  m  part  to  the  fact  that  some  made 
their  own  cans,  it  was  partly  due  to  differences  in  prices  charged  by 
the  large  manufacturers.  No  reason  was  found  which  justified  the 
can  manufacturers  in  charging  such  different  prices  for  the  same  size 
of  can  to  different  canners,  except  as  such  differences  arose  out  of 
differences  in  the  times  at  which  contracts  were  made.  The  exclusive 
long  term  contracts  exacted  from  the  canners  by  the  large  can  com- 
panies bind  the  canners  to  buy  all  of  their  cans  from  the  can  companv 
making  the  contracts  duiing  a  period  of  years  (generally  5).  Sucn 
contracts  are  likel^y  to  be  abused  and  should  be  discontinued. 

Umform  accounting. — The  salmon  canners  greatly  need  instruction 
in  accounting;  in  the  li^ht  of  the  reports  siibmitted  by  tlie  salmon 
packers  it  is  clear  that  better  cost  accounting  methods  should  be 
mstalled.  In  this  connection,  attention  is  called  to  Keport  ^  of  the 
Federal  Trade  Commission  on  Canned  Foods,  in  which  it  is  stated 
"that  while  it  is  clearly  desirable  that  each  producer  should  accu- 
rately know  his  own  costs,  it  is  very  doubtful  if  any  public  interest 
is  served  by  the  producers  having  meetings  to  discuss  each  other's 
®osts." 


>  Oovemmeat  Printing  Office,  Washington,  1918. 


INDEX. 


Pag«. 

Alaska io  .iq  in 

Alaska  Packers  Association 13, 4y,  7li 

Alexander  bill Hi  "^^J^ 

Armour  &  Co co  11 

Bonds ^'  ^? 

Booth  Fisheries  Co i  ^  o? 

British  Columbia,  Canada 14, 31 

Brokers oo  ?« 

Jjocation  of A*oo  oc  of 

Rates  of  brokerage 9,  22,  26,  -iH 

Control  of  canners ^^-  ?I 

Merchandising 56 

Investment  of. ^" 

Canned  food "7 

Distribution  of  expenses o® 

Brokers'  prices 65, 57 

California  Packing  Corporation 70 

Catching  salmon,  method  of -•        1° 

Cans.     {See  Cost  analysis) 35, 39, 8(> 

Capitalization ^S 

Central  Alaska 34,60 

Channels  of  trade 24 

Chinese  labor 13 

Coastal  streams 33 

Columbia  River 13. 17,  33 

Competition : 

In  the  export  trade 31 

In  the  salmon  industry 13, 20, 49,  57, 74 

Consolidation  of  the  first  canners 13 

Consumption  of  canned  salmon 7,  31 

Countries  producing  canned  salmon 31 

Contracts  for  sale  of  salmon ^^  ^5 

Centralization  of  control 70 

Cost: 

Difficulty  on  finding 35 

Compilation  of 35 

Analysis  6t 37,  38- 

Items  of 35, 36. 

Sectional 38 

Range  of  cost -  - 40-43- 

By  grades  of  fish  packed 42-44 

Of  canning  by  different  size  cans 44-45 

Of  large  and  small  companies 46-47 

Of  large  and  small  plants - 46-47 

Cudahy  Packing  Co 74 

Deming&  Gould 49,70,71 

Depreciation  {see  Cost  analysis) 36, 40 

Distribution  of  canned  salmon 21, 22,  54 

Eagle  Cliff 13 

Expense ?^'  ^J 

Export  trade 31, 32 

Factory  swells  {see  Cost  analysis) 36 

Fish,  difficulty  of  securing 20, 21 

Food  value  of  salmon *»J 

Founding  of  the  salmon-canning  industry 13 

Fraser  River IJ 

Future  sales "J 

General  expenses 36 

Gorman  &  Co 72 

97684—19 6  81 


III 


Cl« 


Grades  of  salmon: 

Coet... 

Wute  in  canning. . 

Opening  prices 

Average  price 

Growth  of  the  industry. 

Hapgood,  Andrew  S 

Hazard 


INDEX. 


Hatcheries 

History  of  the  salmon  canning  industry 

Hume,  Wm.  and  G.  W. * 

Investment: 

Borrowed  funds,  stocks,  and  bonds 

Average  per  company 

Avefage  per  case  packed ] 

Canners  profit  on 

Brokers  profit  on 

Items  of  cost 37, 38, 

Japan 


M 


Jobbers  (see  Wholesale  grocers) 21,  22, 

Kelley-Clarke  Co ' 

Labels  {see  Cost  analysis) 

Packers,  jobbers,  and  brokers 

Labor  (see  Cost  analysis) 35^ 

Lllf|e-scale  production ' 

Legislation  to  protect  the  supply  of  salmon 19, 

LiDby,  McNeil  &  Libby 

Licenses 

Nets 

New  York 

Nushagak  Bay 

Opening  prices: 

Average  for  1 916-1 7. 

For  different  grades 56, 

Statistics  of 50, 

Outiide  rivers ' 

Ovefhead  expense  {see  Coet  analysis) 

Pacrific  American  fisheries 

Pack  in  cases 

Pick  of  different  grades 

flirts,  for  export  shipping 

Packers,  meat,  relation  of  to  salmon  industry 

Prices  (see  Opening  prices): 

Importance  of  opening  prices 

Factors  in  naming 

Uniformity  of  opening  prices 49, 

Dates  for  naming , 

Brokers 55, 

IVofits: 

Packers 

On  investment 

Per  case  packed 

A  e»  casC'  soau  ---••-•»••••-•--•--•••••.•............,,,.,...........,,,. 

By  districts ....[[[. 

Cost  of  sales 

PugetSmnd i3,'32,*33, 

Raw  lish  {see  Cost  analysis) 

Recommendations 

Sacramento ,[ 

Sales: 

Fnture , 


Spot. 


S.  A.  P  

Meichandising ...[..... 

Sties  agents 21, 22, 


Page. 

42-44 
39 
49 
54 

13-14 
13 
36 
75 
13 
13 

58 

60 

.    60 

61 

64-67 

39,  40 
31 

24,28 
72 
3ft 

28,30 

39,40 
69 

75,76 
73 
19 
18 

32,49 
75 

54 

52,53 

51,52 

19 

36,40 

71,72 

32 

34 

32 

74 

49 
49 

52,53 
54 

56,57 

61 

61 

61 

10,64 

63 

64 

49,52 

35,38 

78-80 

13 

54,55 

55 

54,55 

55,56 

20,28 


INDEX. 


83 


i 


Salmon  (raw  fish):  ^*®*' 

Kinds  and  grades 14.17 

Rise  in  price 20 

Competition  iu  securing 21 

Cost  {see  Cost  analysis) .  21 

San  Francisco 32, 69 

Seattle f2 

Seines 1° 

Selling  expense  {see  Cost  anal^rsis) 47 

Shooks— boxes  {see  Cost  analysis) 35, 40 

Siberia 31 

Spoils  (see  Factory  swells) 36 

Stocks: 

On  hand 49 

Carried  over "4 

Sulzerbill... 11,75,76 

Swift  &  Co 73,74 

Traps: 

Locations 18, 76 

Valuation 1^ 

Licenses J^ 

Operations  of "^q  io 

Advantages  of  desirable 11, 18, 69 

Transportation  of  men  and  supplies 35, 40 

Wakefield  &  Co 73 

Wakefield,  Lee  H 73 

Washington 1^ 

Waste  in  canning 39 

Wholesale  grocers  overbuying 54 

Wilson  &  Co 73 

Wilson  I^shenes  Co 73 

Wilson- Wakefield 75 

Wood  River 75 

ADDITIONAL  COPIES 

OF  TmS  PUBUCATION  MAT  BE  PROCURED  FROM 

THE  SUPERINTENDENT  OF  DOCUMENTS 

GOVERNMENT  PRINTINQ  OFFICE 

WASfflNGTON,  D.  C. 

AT 

10  CENTS  PER  COPY 


Date 

Due 

f«Tl8 

me  loL 

^ 

1 

9 

COLUMBIA  UNIVERSITY  L  BRARIES 


II 


1 


-ft  iQAi  ^ 


A\4rt    ^2^0^ 


H  «.  ■." 


NMNvem 


EN 


O 


TIT 


